What makes a market

market

Fictitious place or institution where supply of and demand for goods and services meet. The free pricing through the interplay of supply and demand ensures that these two variables are balanced. The (ideal-typical) perfect market is characterized in economics by the following properties:
1. The goods are homogeneous, i. H. factually similar.
2. There are no personal preferences among the sellers and buyers.
3. There are no spatial or temporal preferences between the market participants.
4. There is transparency, i. This means that suppliers and buyers have a complete and identical overview of the market.
5. The reaction speed of suppliers and buyers is infinitely great.
If one of these properties is not fulfilled, it is an imperfect market; in reality only imperfect markets exist.

Market is the meeting of supply and demand for a certain good at a certain time in a certain place.

Problem:
(1) Often the place that belongs to the market is only the imaginary middle between two telephones.

(2) The term market encompasses such diverse manifestations as the oil market in Rotterdam, the commodity and securities exchanges, department stores, shops and the marriage market.

(3) Market access can be restricted or unrestricted.

(4) The market can be transparent: a state in which the market participants have a perfect overview of the market and see through the price formation process; it can also be opaque (a common case), which leads to the creation of imperfect markets.

Example:
- Gold market, coffee market, car market.
(Classification according to material goods);
- World market, EC market, Bavarian market.
(Classification according to regions);
- Christmas, Easter, Whitsun markets
(Classification according to seasonal aspects);
- Monopoly, oligopoly, polypol market
(Classification according to the number of providers).

Market in the broadest sense is the meeting of supply and demand. In a narrower sense, the term market refers to special market events such as the stock exchange. The markets can be classified according to product (material and service markets), spatial (national and international markets), temporal (periodic and non-periodic market events), qualitative (- perfect and imperfect markets) and quantitative (monopoly, oligopoly and polypolistic) Markets) characteristics.

In the health industry:

Place where the supply and demand for goods and services meet.

It can also be a real place. For example, the weekly markets or the stock exchange, where the supply and demand for securities meet, are real places that fulfill the function of markets. The market for steel or crude oil also fulfills the function of a market, although these are not necessarily real places where steel or crude oil are traded. The labor market also falls into this category because it fulfills the function of meeting the supply and demand for labor.

The concept of the market is often associated with the effects of market forces in largely free competition. For example, supply and demand form the market price in competition. This image of the free market and, derived from it, the market economy is opposed to the planned economy, in which the processes on the market are determined not by competition but by planning, for example by price, supply and demand.

The health system, too, which for a long time was viewed exclusively or at least predominantly as part of the state's general welfare, is increasingly seen from the perspective of the health market. In this context, competition should take on control functions in a wide range of areas and determine prices, capacities and quality within a regulatory framework prescribed by the state. Nevertheless, the healthcare market remains an imperfect market, as it is characterized, among other things, by a strong unequal distribution of information.

In socialist economics: meeting of buyers and sellers who are left to the spontaneous market forces. These market forces are represented by the commodity-money relationship and the law of value. The market is the concrete sphere of the circulation of goods and the totality of the realization and procurement conditions (competition) in the economy. The apparently regulating. The corrective and price-forming function of the market is the basis of almost all bourgeois economic theories. The theories range from the bare market economy to market regulation and they are constantly being adapted to capitalist developments. A theory of future markets (endo-markets) represents the idea: The growth markets of the future are increasingly less the real (exo) markets such as the tiger states, China or Latin America, which predominantly understand the ecological undesirable developments of the industrial centers, but endo-markets that arise through innovative networking of the most diverse participants on a local as well as on a global level. In the future, growth will no longer take place solely through the integration of domestic markets, but above all through the formation of new types of virtual colonies in cyberspace. Future customers are no longer to be delimited by country, but only according to their affiliation to different virtual networks. Serving these networks with the best possible software is the main task of future high-tech companies. Simulations are experiencing a boom because they are the key technology for building the knowledge economy. Only through simulation can the necessary framework conditions for virtual cities, virtual economies, virtual organizations or virtual money be established. > Sales,> Supply,> Supply and demand, supply-oriented,> Electronic market,> Free market. > Demand-oriented,> Market analysis,> Market share,> Market absorption,> Market dominance. > Market research,> Market mechanism,> Market price,> Market regulation,> Market value. > Market economy,> monopoly,> black market,> state> contradiction between production and market

Competition theory understands the market to be the economic place where supply and demand meet. In this respect, the market is characterized by a complex structure of relationships between suppliers and buyers, which are also referred to as market participants. The theory of the competitive economy (market economy) understands the market as a cybernetic self-regulation mechanism.

In a concrete sense, market refers to an event in which buying and selling are carried out, e.g. weekly market, fair. The terms “gray market” and “black market” are metaphorical. A gray market is understood to mean the legal sale of goods by circumventing private law agreements, recognized commercial customs or tax regulations. Individual market participants try to gain advantages from this. Gray markets include, for example, direct sales by industry and wholesalers, bypassing the usual levels of trade (retail chain), e.g. retail, to end consumers. This saves the end consumer trading margins. Another form of the gray market is relationship buying. A black market is an illegal market. Black markets usually arise in times of need, for example when there are quotas or when the production or distribution of certain goods is prohibited. Black markets are usually characterized by excessive sales prices.

The relevant market plays a key role in the GWB. This theoretical construct is used to delimit market power or a reduction in competition. The definition of the relevant market is possible according to different criteria, so a distinction is made

- the relevant product market (delimitation according to the demand market concept / concept of functional interchangeability or substitution of the opposite side of the market)

- the relevant geographic market (delimitation according to the geographic exchange possibilities of the opposite side of the market; generally corresponds to the scope of the GWB)

- temporally relevant market.

The market as a constitutive element of economic theory is understood on the one hand as a process: supply and demand meet, and suppliers and buyers exchange services, embedded in a competitive process. This process is carried out by subjects and relates to objects, to which a second variant of meaning is linked: the market as a set of buyers including their needs, of goods as useful bundles of properties and of providers with the instruments of utility (products, prices, advertising, Distribution). The "elementary market" (Heinrich von Stackeiberg) with a supplier, a good and a customer and the "total market" (von Stackeiberg) with all suppliers, all goods and all customers form the extreme variants of a three-dimensional space in which any number of subspaces can be delimited are. Accordingly, the market definitions that can be found can be described as single- or multi-element definitions: The demand is taken into account if the market is understood to mean the amount of those demanders who have bought a certain product type in the past. If, on the other hand, the market is spoken of as a set of products (e.g. the car market), the products are emphasized as a constitutive characteristic. Furthermore, the providers are explicitly included in the market concept if the market is understood to be a group of (consumers and) competitors who compete with one another (market types). Finally, in the broadest definition, all three elements become visible when a market is defined as the relationship between buyers and sellers of a certain good or service. Market processes grow out of the reactive behavior of market participants. The adjustments to changes in market data take place i. d. Usually not in one step, but in the form of a chain of changes in the market variables over time. Market data is the designation for macroeconomic and individual economic conditions that influence economic processes and market events without being able to be influenced by the company itself - at least directly and in the short term. These data are to be determined regularly as part of a market analysis and taken into account when developing marketing planning. This includes, for example, the market potential, i.e. the maximum sales volume that can be realized with given hypotheses about the demand from the providers of a certain sales service in the reference period. The market potential thus reflects the absorption capacity of a market. A competitive market process ensures adaptation to changes in market data, such as changes in demand, the realization of technical progress, incentive compatibility, fair distribution and freedom of economic agents in their market behavior (market evolution). Within a market, the market equilibrium is defined by an equilibrium price and an equilibrium quantity (equilibrium theory). This market equilibrium is important in two respects: If the market equilibrium has occurred, the economic plans of suppliers and buyers are compatible with one another. As long as the market equilibrium has not yet been reached, either an oversupply or an oversupply occurs at the end of the period. d. Bring closer to equilibrium (tendency towards stable equilibrium). In reality, market equilibria are seldom achieved, and if so, then only for a short period (short-term market equilibrium). The reason given for this is mainly the data changes that occur frequently in reality, which lead to shifts in the supply and / or demand curve, even before the equilibrium determined by the old conditions is achieved. Literature: Fehl, U./Oberender, P., Fundamentals of Microeconomics, 5th edition, Munich 1992. Samuelson, PA, Volkswirtschaftslehre, 7th edition, Cologne 1981. Woll, A., Allgemeine Volkswirtschaftslehre, 10. Ed., Munich 1990.

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