Markets

During earlier periods of history, a market was a place where buyers and sellers actually met to exchange their goods and services. Farmers came to town and set up stalls to display their produce. Townspeople would then come and buy the produce directly from the farmers. Some communities in the United States still have ”farmers” markets which operate in much the same way today. However, most goods and services are no longer exchanged in this way.

The term market now refers to more that a physical location. Now a market is considered to be any system or arrangement that enables buyers and sellers to negotiate prices and exchange goods and services. We buy and sell goods, and services through letters, newspapers, telephone, TV, and computer networks as well as personal relationships and face-to-face discussions. Further, the original producer and the final consumer of the good may not deal with one another directly. Instead, there are many people or businesses who perform specialized functions that help move goods from producer to consumer. For example, most farmers sell their vegetables or fruit to wholesalers who package or process the produce and transport it to grocery stores. Consumers then buy the produce from the grocery store.

Market aren’t limited to the exchange of goods. They are also used to exchange labor, services, property, and even money. If you answer a newspaper ad for a part-time job, you are taking advantage of the labor market. The employer is the buyer who needs workers, and you are the seller of your labor to the employer.