1. Introduction to Markets

2. Introduction to Markets
Market – any place or process that brings together buyers and sellers with a view to agreeing a price
The basis of how an economy operates – through production and subsequent exchange

3. Introduction to Markets
The range of markets:
Organised markets – commodities e.g. rubber, oil, sugar, wheat, gold, copper, etc.
Financial markets – stocks, shares, currencies, financial instruments
Goods markets – the supply and demand of goods and services in general, food, clothing, leisure, houses, cars, etc.
Factor markets – the supply and demand of factors of production – land, labour and capital

4. Introduction to Markets
A market does NOT have to be a physical place like a shop
The market place consists of all those who have items/services for sale and all those who are interested in buying those items/services
Many businesses have global markets because of the developments in technology – see

5. Introduction to Markets
Demand – the amount consumers desire to purchase at various alternative prices
Demand – reflects the degree of value consumers place on items – price and satisfaction gained from purchase (utility)
Supply – the amount producers are willing to offer for sale at various prices
Supply – reflects the cost of the resources used in production and the returns/profits required

6. Introduction to Markets
Factors affecting the efficiency of markets
The amount of information about the markets held by consumers and producers
The ease with which factors of production can be put to alternative uses
The extent to which price is an accurate signal of the true utility and true cost in determining the level of demand and supply (externalities)
The degree to which firms hold monopoly power
The degree to which property rights are clearly defined
Whether the market can provide goods and services (public goods)