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Category: Business and Industry
Date Submitted: 04/07/2011 09:21 AM
Market Failures and Government Policy in the UK
1. Definition of Market
About.com/economics defines” A market is any place where the sellers of a particular good or service can meet with the buyers of that goods and service where there is a potential for a transaction to take place. The buyers must have something they can offer in exchange for there to be a potential transaction”. This is the dictionary meaning of market. Market in broader sense is not only the place of buyers and sellers but an integral component of whole economy. Arthur Sullivan and Sheffrin M. Steven define economics in their book Economics: Principles in action that A market is any one of a variety of systems, institutions, procedures, social, relations and infrastructure whereby businesses sell their goods, services and labour to people in exchange for money. Goods and services are sold using a legal tender such as fiat money. This activity forms part of the economy. It is an arrangement that allows buyers and sellers to exchange items. Competition is essential in markets, and separates market from trade. Two persons may trade, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. This definition of market is a bit scientific which covers almost most of the aspects of market. Actually market is the heart of economy which allows economy to grow and prosper.
In mainstream economics, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and information. The exchange of goods or services for money is a transaction. Market participants consist of all the buyers and sellers of a good who influence its price. There are two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution and allocation of resources in a society. Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneously or is...