Introduction
Markets provide a platform for the exchange of goods and services. Normally, different regions – continents, countries, states, counties and villages – have varying amounts of resources. Some have abundance while others have scarcity, of a particular commodity. The market is the interaction of the forces of demand and supply for these products, an economic interaction that determines prices for the goods and services. On one hand there is the producer looking to sell his/her goods in exchange for money, and the other hand has a consumer who wants to buy the produce. Essentially, markets provide people with options and alternatives. The mediators earn a profit on hoarding the produce. The primary functions of markets are explained below ("Meaning of Market and Market Function | Economy Watch,")
Main functions of markets
The main benefit of this market arrangement is the provision of goods and services to consumers. Ideally, if the world did not have markets, people would be living in privation, because no community can be self-reliant. The goods and services come from different parts of the world, targeting the needs of the consumers. So, technically, the market thinks about people needs and wants, then provide them at a cost. The exchange of goods and services fosters specialization, as people in a particular region get to understand their strengths, and the goods they can produce without much problem.
Of course, the benefits provided by the markets come with costs, mainly, the price one has to pay to take possession and ownership of a certain good. Economic factors intersect at a point where the cost is a reflection of buyers demand price, determined by the level of consumption. Sometimes, this cost is too high for most consumers in the economy, like in the case of medicine and medical care. The government intervenes in such situations by giving subsidies so as to make the goods more affordable. The government can also affect the price of goods and services (the cost to the buyer), by scrapping out taxes on the products.
Markets also act as places of social gatherings (Acts 7:17). People meet in local marketplaces to catch up with friends and neighbors. This interaction helps in constructing relationships between buyers and sellers. In some communities, forums on issues like the environment, health, and new government regulations are held in the marketplaces. In that case, a market acts as a medium of exchange of ideas (New International Version, Acts 7:17.)
Price is an integral aspect of any market. The price of any good is determined by the number of people who need it, vis-a-vis the quantity of that good that is available for sale. In times of scarcity, commodity prices usually rise, while in times of abundance they go down. In a local vegetable stall, for instance, the price of carrots will be determined by the general availability of carrots and the levels of consumption of carrots. Supposing that the rains fail, or a disease strikes carrots in the farms, the supply, or the quantity available for people to buy, will go down, making people scramble for smaller quantities of carrots, therefore raising the prices.
Conclusion
As shown, markets provide exchange efficiencies that result to economic balancing. Through the markets, people get to spend their money on goods and services, in the order of their priorities. It means allocating limited or scarce resources on the goods and services needed. Prices are the means through which buyers and sellers get into agreement.
References
Meaning of Market and Market Function | Economy Watch. (n.d.). Retrieved from http://www.economywatch.com/market/overview/meaning-of-market.html
New International Version. (n.d.). Book of Acts - Read the Bible Online. Retrieved from http://www.biblestudytools.com/acts/
