Market and market

economy

1. Market: concept, causes and market functions.

2. Limited market opportunities
3. Classification of markets.

The presentation was prepared by 1st year

student Viksman Maria (6.04.051.100.19.1)
HNEU
 The evolution of the concept of
"market"
 Initial Understanding of the Term
The meeting place of the seller and the buyer
(orientation to indicate a specific event, place and
time)
 Later understanding of the term (neoclassic)
The method of interaction of supply and demand
(compromise of interests of 2 parts, equilibrium price)
 Modern understanding (institutionalism)
Method for spontaneous coordination of economic
agents
 The fundamental principles of a
market economy
 Private property on investment resources
 Freedom to make economic decisions (freedom of
enterprise)
 The priority of personal interest over the public
(individualism)
 The presence of free competition (a mechanism
ensuring the equality of the rights of producers and
consumers, as well as a balance between the
interests of the individual and society)
 Reliance on the mechanism of self-regulation
(based on a system of mutual adaptation of market
entities)
 Social inequality (in the market system, as a rule,
the most active actors win; those who do not have
the necessary potential lose out)
 Market orientation of the state (carries out the
correction of market costs)
 Subjects of market relations

 household
 enterprise (firm)
 bank
 state
 The circulation of goods, income and
expenses
Household cash income
Savings Investment

Banks Enterprises
Household (firms)
Revenues (resource fee)

Taxes Taxes

Government
Government Payment for goods,
transfers services and subsidies
 The main functions performed by the
market:

Pricing Regulatory

Market functions

Sanitizing Mediation

Informational
 The main functions performed by the
market:
1. Pricing - the interaction of supply and demand
equilibrium price (the result of
reaching an agreement, a compromise among
the counterparties of a market transaction
regarding the costs and usefulness of
exchanged goods)
2. Regulatory - regulates the distribution of
resources by industry and needs
3. Mediation - all participants are divided among
themselves:
- according to the conditions of production
- by territory
- by interest
Market - a means of unification, communication,
contacts of participating entities
4. Informational - informs manufacturers about
where and what products are missing.
Information indicators:
- price
- price index (price dynamics)
- interest rate
- Exchange Rates
- analytical indices
5. Sanitizing - cleans social production of
economically unstable, non-viable units
(through the competition mechanism)
II . Limited market
opportunities
Disadvantages of the market
mechanism
 inequality in the distribution of income;
 does not create incentives for development
of fundamental science;
 not interested and not able to produce public
goods;
 monopoly formation;
 causes unemployment, crises, inflation;
 does not guarantee the right to work;
 not conducive to environmental protection.
 III. Market classification

By the criterion of scale and territorial boundaries:

 local market (within the village, city, district,
region, region);
 national (or domestic) market;
 global (or foreign) market.
According to the criterion of economic purpose of
objects of market relations:
 capital goods market;
 labor market;
 capital market;
 stocks and bods market;
 market of goods and services;
 information market, etc.
By the degree of restriction of competition:
 Free market
 Monopolistic market
 Oligopolistic market
 Mixed market
By the nature of sales:
 Wholesale market
 Retail market
 Wholesale and retail
By industry:
 Car market
 Legal Services Market
 Grain market
Market Economy Infrastructure

 - this is a set of interconnected specialized

institutions operating within special markets and
performing certain functions to ensure the normal
mode of their functioning.

 Institutions - the totality of enterprises that ensure

the functioning of market relations, the successful
operation of all types of markets.
Infrastructure activities include:

 collection, synthesis and dissemination of economic

information;
 special market research activities to increase sales;
 activities for the public submission of information on
business entities, goods and services;
 assessment activities of individual business entities
and instruments of their activities.
THANKS FOR YOUR
ATTENTION 