Marketplace: definition and key features

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:40

In the literature, the market, as a rule, means the place of sale and purchase of products. But to consider this representation complete is a big inaccuracy. Market - a definition that characterizes the system of socio-economic relations in the field of exchange and sale of goods, as well as the absolute recognition of these products by society.

Various interpretation of the concept

An interesting feature of the term under consideration is its variability due to the development of society, as well as material production. Thus, the original "market" was equivalent to a "bazaar", that is, a place intended for market trade. This fact can be explained by the fact that the emergence of the market is directly related to the period of decomposition of the primitive communal society. Then the mutual exchange between the communities was characterized by more and more regularity. In addition, the implementation was determined by a specific place and time.

Oh. Curio, the famous French economist, gives the concept of the market a more complex interpretation. He argues that the market is a definition that reflects the absolute freedom of relations between sellers and buyers. Another interesting interpretation isidentification of the market with the exchange of goods, which must fully comply with the laws of commodity-money circulation.

What else?

Often in the literature one can find such a definition of the concept under consideration as a set of sellers and buyers. In addition, the market is often characterized as a type of economic relations between economic entities. In other words, it is a mechanism for activating the interaction between production processes and consumption. Modern literature informs that the market is a definition that is explained as a social form of organization and further functioning of the economy. This is a set of interrelated elements, the main among which are economic relations between sellers, buyers of goods, as well as intermediaries (they solve the issues of organizing the movement of goods and funds). These relations reflect the interests of the subjects of market relations in economic terms, and also fully ensure the exchange processes regarding the products of labor.

The market is a concept of economic interest

Market is a definition in economics that characterizes the system of economic relations between subjects, which covers all stages of the social reproduction process: production, subsequent distribution, exchange and, of course, consumption. The term under consideration is the most complex mechanism that regulates the economy, the basiswhich are such elements as various forms of ownership, commodity-money relations, as well as the financial and credit system. In other words, it is advisable to consider the market as a specific type of economic system (it is also called economic). The final interpretation of such a multifaceted concept is the definition of the market as a set of transactions in relation to the purchase and sale of any goods or services.

In the process of getting acquainted with the interpretations of the concept, it turned out that the market is a definition that has a huge number of facets. However, as a universal designation, the market should be understood as a mechanism that qualitatively brings together buyers, who organize demand, and sellers, who create an offer of material goods.

Market: Definition and Functions

The essence of the concept under consideration is fully manifested through functional features. Thus, it is customary to single out the following market functions:

• Self-regulation of the production of goods: through the activation of the market mechanism, the processes of production and consumption are automatically coordinated, and the balance of supply and demand in terms of volume and structure is optimally maintained. Regulation is carried out through the sale and purchase of the goods of material production.
• Incentive: The market incentivizes manufacturers so they can create the right products while minimizingproduction costs in order to be able to practice profit maximization in the future.
• Providing information about production costs, quantity, product range, and quality.

Additional features

The important elements of the functional set in relation to the concept under consideration are the following points:

• The intermediary function explains that producers, being economically isolated due to the conditions of the social division of labor, as a rule, find each other in the market, after which they exchange the results of their economic activity.
• The regulatory function causes the market to establish optimal proportions between economic entities both at the micro and macro levels. This happens through the expansion or contraction of supply and demand in relation to individual markets or to the entire economic system as a whole.

Market: definition, types

In the modern economy, it is customary to classify markets according to a number of criteria. For example, according to the purpose in the economy, the market for goods, money, and labor is distinguished. Market is a definition (economy) based on versatility. Therefore, the second sign for classification is the process of organizing the exchange, according to which it is customary to distinguish between the wholesale and retail markets. In addition, there is a classification by form of ownership, which implies the presence of private, cooperative, and public markets. The division by industry implies the existence of automotive, computer, agricultural and other types of market structures. An important classification of markets is the division of the system in accordance with the types of competition. So, it is customary to isolate the markets of perfect and imperfect competition. It is important to note that the latter are to be classified into oligopolies, monopolies and markets of monopolistic competition.