Market Is An Actual Or Nominal Place That Forces Of Demand

Market is an actual or nominal place that forces of demand and supply operate (Challet, 1997), under this situation, buyers and sellers interact directly or through intermediaries to trade goods and services. Market including mechanisms or means for determining price of the traded item and available goods and services (cox, ibid.). Communicating the full price information. Facilitating deals and transactions, and effecting distribution. The market for particular items is made up of potential customers who need these goods and services and have the ability and willingness to pay for it. In a market, prices are determined as different level of demand and supply, weather in the short term or in the long term (Simon, 1997). However,†¦show more content†¦Governments also monitor retailer market for signs of collusion and fixed prices (Cox, ibid). For example, if there are two milk sellers in a small village, they could agree to both charge the same high price for the milk in order to increase their own profits. However, this practice is illegal under federal law, if found guilty, the retailers could face substantial penalties and lose consumer in a short time, because their action of increasing price and lead to inflation would influence consumers willingness. The view of the money enigma is the microeconomics models of price determination in free market. Limitation and one side view of the price determination process. In this week’s post, we shall explore the theory which every price is a function of two sets of demand and supply. Specifically, the price of primary good in terms of another good, is determined by both supply and demand for the primary good and supply and demand for measurement goods and services In this free market, market mechanism help translate scarce resources to where they need the most. Through different functions, sellers could balance the relationship between increasing price level and unchanged quantity supplied. As shown in graph, supply increased, supply curve shift to the right. This lead to a decrease in average price level (from P1 to P2) and increase in quantity supplied (from Q1 to Q2), shift of supply curve also lead to shift of equilibrium, if the demand remainsShow MoreRelatedForeign Exchange Mark ets Trade Currencies1075 Words   |  5 PagesForeign exchange markets trade currencies around the world. Traders in large banks in North America, Europe, and Asia carry out the majority of the buying and selling of foreign exchange. A foreign exchange rate is the price of a country s currency in terms of another currency. Exchange rates are determined in the foreign exchange market. 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