Markets are where buyers and sellers exchange goods: in economics we often talk about markets (or even ‘free markets’), and the free-market economy is often contrasted with an economy where there is government intervention.
In the simplest models, markets are modelled using supply and demand curves and the conclusion is that markets can achieve an efficient outcome. For example, if there are lots of buyers and sellers (perfect competition) then everyone who is prepared to pay what it costs to produce a good is supplied with that good; this can be compared with a situation with lots of buyers and just one seller (a monopoly), where some buyers would be willing to pay to buy the good at a price greater than the cost of production, but the monopoly supplier restricts output.
Your organisation does not have access to this article.
Sign up today to give your students the edge they need to achieve their best grades with subject expertiseSubscribe