Moscow State University of Printing. Section II Microeconomics Microeconomics market its types and types

Market in marketing- ϶ᴛᴏ the totality of existing and potential buyers of a product or service. These buyers have common needs or requests that can be satisfied through exchange.

The size of the market depends on the number of buyers who have a need for a product, have the means to make an exchange, and the desire to exchange these funds for the desired product.

In the process of historical development of the market (commodity) economy, the understanding of the market and the market mechanism, their essence, changed, the market itself and its mechanism changed, and their role in the economy grew. Initially, the term “market” meant a place where sellers and buyers could exchange goods. For example, the central square of the city.

In economic theory, the market is one of the most common categories, one of the basic concepts of economic practice.

Market in economic theory— ϶ᴛᴏ a set of economic relations between market entities regarding the movement of goods and money, which are based on mutual agreement, equivalence and competition.

The founder of market theory is considered to be a representative of the classical school, Adam Smith, who was the first to point out the reasons for the development of commodity exchange, and therefore the market. Adam Smith considered this reason to be the limited production capabilities of man, which can be increased through the social division of labor, which ultimately leads to the emergence of exchange and the formation of a market.

Market mechanism

Market mechanism— ϶ᴛᴏ mechanism of interrelation and interaction of the main elements of the market: demand, supply, price, competition and the basic economic laws of the market.

The market mechanism operates on the basis of economic laws: changes in demand, changes in supply, equilibrium price, competition, cost, utility and profit.

The main operating goals in the market will be supply and demand; their interaction determines what and in what quantity to produce and at what price to sell.

Prices will be the most important instrument of the market since they provide its participants with the necessary information, on the basis of which a decision is made to increase or decrease the production of a particular product. In conjunction with this information, the flow of capital and labor from one industry to another occurs.

Free (competitive) market- a self-regulating system that achieves results and maintains its balance spontaneously, without the intervention of external forces.

Signs of a tight market:

• Unlimited number of competitors.
• Sign, ϲʙᴏfree access and exit from the market.
• Absolute mobility of all resources.
• Availability of complete information (through prices)
• Absolute product homogeneity.
• No one competitor can influence the decisions of others.

Functions of the free market:

• It is a regulator of the economy.

• It is a means of ensuring national economic relations.
• Is a tool of information (through prices)
• Provides optimization of the national economy.
• Provides rehabilitation of the national economy.

Market conditions

The economic situation of producers and consumers, sellers and buyers depends on market conditions, which change under the influence of numerous factors.

Market conditions— ϶ᴛᴏ a set of economic conditions developing on the market at any given moment in time, under which the process of selling goods and services is carried out.

Market infrastructure

Market infrastructure— ϶ᴛᴏ a set of institutions, systems, services, enterprises that mediate the movement of goods and services, serving the market and ensuring its normal functioning.

The market infrastructure contains such elements as:

• exchanges
  • trading
  • stock
  • currency;
• auctions, fairs;
• wholesale and retail trade enterprises;
• banks, insurance companies, funds;
• labor exchanges;
• information centers;
• legal offices;
• advertising agencies;
• auditing and consulting firms, etc.

All these elements are very closely related to each other. If they are in equilibrium, then the entire economy is also in equilibrium. Conversely, the destabilization of at least one of the elements is negatively demonstrated throughout the market economy as a whole.

Market structure

Market structure— ϶ᴛᴏ internal structure, location, order of individual market elements.

The following criteria can be distinguished for classifying market structure:

• Market structure by objects of market relations
  • market of consumer goods and services
  • stocks and bods market
  • raw materials market
• Market structure by market subjects
  • buyers' market
  • sellers' market
• Market structure by geographic location
  • local
  • National
  • world
• Market structure by degree of competition restriction
  • perfect competition
  • monopolistic competition
  • oligopoly
  • monopoly
• Market structure by industry
  • automotive
  • oil
• Market structure by sales nature
  • wholesale
  • retail
• Market structure according to current legislation
  • legal
  • illegal
  • "black market

Market functions

Information function

The market provides objective information about changing economic conditions:

• number of products produced
• range
• quality

Intermediary function

The market allows economic agents to exchange the results of their economic activities.
The market makes it possible to determine how effective and mutually beneficial a particular system of relations between specific participants in social production is.

Pricing function

The market establishes value equivalents for the exchange of products. In this case, the market compares individual labor costs for the production of goods with a social standard, that is, it compares costs and results, reveals the value of the product by determining not only the amount of labor expended, but also the amount of benefit that the product brings to society.

Regulatory function

A balance arises between producer and consumer, between seller and buyer.

Stimulating function

The market encourages manufacturers to create new products, necessary goods at the lowest cost and obtain sufficient profits; stimulates scientific and technological progress and, on its basis, increases the efficiency of the entire economy.

Enterprises that fail to solve the problems of improvement go bankrupt and die due to competition, making room for more efficient ones. As a result, the level of sustainability of the entire economy as a whole is gradually increasing.

Advantages and disadvantages of the market mechanism

Advantages of the market mechanism

While not ideal, the market mechanism nevertheless has a number of advantages unique to it:

• Efficient resource allocation, mitigating resource constraints.
• Ability to operate successfully with very limited information (sometimes price and cost information is considered sufficient)
• Flexibility, high adaptability to changing conditions, quick adjustment of disequilibrium.
• Optimal use of scientific and technological progress (in an effort to obtain maximum profit, entrepreneurs take risks, developing new products, introducing the latest technologies into production)
• Regulation and coordination of people's activities without coercion, that is, freedom of choice and actions of economic entities.
• The ability to meet the diverse needs of people, improve the quality of goods and services.

Disadvantages of the market mechanism

• Does not contribute to the conservation of non-renewable resources.
• Does not have an economic mechanism for environmental protection (legislation is needed)
• Does not create incentives for the production of goods and services for collective use (education, health care, defense)
• It does not provide social protection for the population, does not guarantee the right to work and income, and does not redistribute income in favor of the needy.
• does not provide fundamental research in science.
• Does not ensure stable economic development (cyclical booms, unemployment, etc.)

Everything predetermines the need for government intervention, which would complement the market mechanism, but would not lead to its deformation.

Markets in the national economy

National markets: concept, types, principles of organization

Nationwide market— ϶ᴛᴏ economic structure that ensures effective interaction between consumers and producers.

The national market is distinguished by the following characteristic properties:

• the exchange procedure is based on basic economic laws;
• the process of interaction between consumers and producers finds its expression in supply and demand;
• will be a means of effective interaction between consumers and producers.

For the normal functioning of the market, the process of movement of goods is regulated by regulations, which creates its legal field.

The structure of the national market includes the following markets:

• Market of economic resources, which includes the process of circulation of resources necessary for the production of goods. The goods here are production resources, and their pricing occurs as a result of the interaction of supply and demand;
• Financial market, which includes the circulation of a specific product - capital, the price for which is determined by the interest on the use of money;
• Labor market. It is based on the free relationship between employee and employer, and labor becomes the subject of purchase and sale. Its price is set as a result of the interaction of supply and demand for it. Supply is a proposal from people who want to work. And demand is the need for employees of a certain qualification and profession;
• Market of consumer goods, which is a process of interaction between producer and consumer regarding a good - the result of economic activity. The material was published on http://site

It is worth noting that they represent the four main elements of the national market - economic resources, capital, labor and consumption, the functional interaction of which determines the specifics of the national market.

The object of the market will be the good - goods and services that are included in the subject of circulation on the market.

The essence of the national market is associated with its specific qualitative and quantitative characteristics.

The main quantitative characteristics of the market will be:

• number of manufacturers on the market;
• number of consumers in the market;
• distribution of positions between manufacturers;
• the degree of market concentration, i.e. the volume of transactions carried out on it for the purchase and sale of goods.

The main qualitative characteristics of the market will be:

• the possibility of new manufacturers entering the market;
• the number of barriers to entry of new manufacturers into the market;
• level of competition in the market;
• degree of exposure to external factors;
• the presence and degree of interaction with other markets, such as international ones.

The interaction of a set of qualitative and quantitative characteristics determines the type of market.

Taking into account the dependence on specific conditions, each of the national markets can exist as:

It is worth saying - polypoly -϶ᴛᴏ market of perfect competition. It is important to know that a large number of producers and consumers of one type of good allows you to quickly respond to price changes.

For the functioning of this type of market, a prerequisite will be the uniform behavior of all producers and consumers who have all the information about the state of the market. It is worth noting that it is not subject to external regulation and acts freely, based only on the interaction of a large number of independent producers and consumers. The existence of such a market is impossible in practice, since there cannot be absolutely free producers and consumers in the market, and information will almost never be available to everyone;

Monopoly- a market in which there is only one producer of a certain good and many consumers. A producer occupying a monopoly position in the market offers a unique good that cannot be replaced by another, and sets the price for it independently;

Monopolistic competition -϶ᴛᴏ a market in which several large producers of a homogeneous good operate. This good is essentially homogeneous, but each monopolist represents it with distinctive, unique features - a product segment. Note that each monopolist has the necessary economic power to independently set the pricing policy for the good it produces, but it is limited to the extent that the consumer will be forced to switch to using a substitute product. In these conditions, the monopolist’s activities are aimed at enhancing the degree of individuality of the good he offers (for example, with the help of a certain trademark, brand, sign);

Oligopoly— ϶ᴛᴏ a market in which several producers of a good with a homogeneous composition accept an agreement on the development of a unified pricing policy and supply volumes. There is a tendency towards stable pricing policy, and entry into it for new producers is either difficult or impossible.

The structure of the national market is heterogeneous; it includes a large number of smaller markets. They usually specialize in the circulation of a certain economic resource or benefit. The interaction of these markets of the national economy is the essence of the national market, determines its dynamics and pace of development.

Market failures

Market failures include:

• natural monopolies- one firm satisfies all the demand for products, since the more it produces, the lower its average costs. Natural monopolies include railways, the country's energy system, the metro, etc. Increased competition, i.e. the emergence of other manufacturing firms reduces the efficiency of using limited resources, since new firms would have to build parallel communications in the course of competition;
• information asymmetry will be that one economic agent has more information about any object or phenomenon than his partner. In this case, he finds himself in a more advantageous position and can extract excess profit from it. Information asymmetry will be especially strong in industries such as education and healthcare, since a person is not able to assess in advance the qualifications of a teacher or doctor. In a free market (without government intervention), such a situation would lead to a deterioration in the quality of education and medical services, and, consequently, would reduce the welfare of society;
• externalities- a situation when the actions of an economic agent affect third parties not related to this economic agent. An example of a negative external effect would be environmental pollution from a manufacturing plant, loud music from neighbors, etc. With all this, there are also positive external effects, for example, the location of an apiary next to an orchard (bees pollinate flowers, increasing the yield and amount of honey). Since in a free market the producer is not interested in the external effects he creates, and in most cases they are harmful, the state should take control of them;
• public goods- benefits that are enjoyed by all members of society without exception, and their volume and quality do not depend on the number of consumers. Such benefits include national defense, laws, law and order, the health care system, etc. The market is not able to produce such goods, since it cannot provide payment for these goods (since no one can be excluded from using this good). The state, by collecting taxes, is able to provide financing for public goods.

By the word “market”, economists mean not any specific trading space where goods are bought and sold, but the entire region in which sellers and buyers are in such free communication with each other that the prices of identical goods become approximately equal easily and quickly .

General forms of organization of production. Natural and commercial production. Conditions for the emergence of commodity production. Goods as an economic category.

Use value and cost of goods. Basic theories of value: labor theory of value, marginal utility theory, neoclassical theory of value.

Direct exchange of goods (barter). The emergence and essence of money. Functions of money. The essence of market relations. Basic elements of the market. Interrelation of the main elements of the market. The principle of the “invisible hand” of the market.

Classification of markets. Market functions. Conditions for the effective functioning of the market. Advantages and disadvantages of the market. Conditions for the transition to a market economy in Russia.

The market, which originated many centuries ago, developed naturally, went through a difficult path of development, changing, adapting to changing conditions, thereby proving its viability. In this sense, the market economy can be considered an achievement of human civilization, as the most effective of all forms of organization of social production known so far. This is not some speculative scheme, artificially constructed and forcibly implemented.

Moreover, the very fact of not only the centuries-old successful functioning of the market mechanism, but also the dominance of market relations in our days in the vast majority of countries testifies to the naturalness, normality of market relations in the sense of their correspondence to human nature (at least while a person is what he is ).

So, let's look at the beginning of the history of the “creation” of the market. General forms of production organization:

• - natural economy- production of products to satisfy one’s own needs, when everything necessary is produced within the farm and supplied to the consumer through direct distribution;
• - commercial farming - production of products by individual isolated producers for the purpose of sale or exchange on the market.

Signs of subsistence farming are:

• - direct relations in production, distribution, exchange and consumption;
• - products are produced for own consumption;
• - division of labor within the community by gender and age;
• - communal (public) ownership of the means of production.

Subsistence farming predominated in pre-industrial socio-economic systems. Humanity lived the longest page of its history with a subsistence economy. Understanding its essence is the starting point for the study of commodity production.

Conditions for the emergence of commodity production:

• 1) social division of labor, those. the specialization of each manufacturer in the production of one product, so that exchange on the market is necessary to satisfy all needs;
• 2) economic isolation of producers as owners implies the isolation of factors of production, their own economic interest, independent regulation of production, reproduction at their own expense.

Product- a product of labor produced for exchange and satisfying some need.

According to economic theory, if a good is not a product of labor, it is not a commodity. For example, an apple growing wild in the forest, air, sunlight.

In addition, if goods are not needed by anyone, do not satisfy any needs, even if they are a product of labor, this is also not a product. If the product of labor satisfies needs and is produced for one’s own consumption and not for exchange, it is also not a commodity.

The definition of a product implies two of its main properties.

• 1) use value(utility) is the ability of a product to satisfy a certain need;
• 2) exchange value- a quantitative relationship in which some goods are exchanged for others.

Exchange value is often referred to simply as “value” in economic literature.

Aristotle: “Shoes are also used to put them on

on the legs, and in order to change it for something else.”

What makes goods comparable in exchange? Cost (value) is defined by scientists in different ways. Since useful things are exchanged, is it not logical to assume that value is determined by the measure of utility? Condillac and Galiani, French economists of the 18th century, made this assumption and constructed a utility scale.

According to it, it turned out that bread, which is undoubtedly more useful for a person, is still cheaper than a diamond. Then maybe it's a matter of rarity? After all, diamond is much rarer than bread.

But rarity itself does not determine anything: one of the rarest metals - platinum - got its name from the contemptuous “silver” - with such an exclamation the Spanish conquistadors threw precious platinum from the side of their “golden galleons”. There was no need for platinum, there was no demand for it, although it was rare. So, maybe it's a matter of supply and demand? How is cost determined if demand equals supply?

In this thorny way, economics came to the following basic concepts of value: labor theory of value(D. Ricardo, K. Marx, J. S. Mill), marginal utility theory(K. Menger, E. Boehm-Bawerk, F. Wieser) and neoclassical theory of value(A. Marshall).

The labor theory of value states: value is an objective property of a product, determined by socially necessary labor costs, i.e. labor is the only source of value. Value is created in the production process and manifests itself in exchange.

D. Ricardo: “The cost of an individual product and all goods that form national income is determined objectively by labor costs.”

Marginal utility theory: the cost (value of a product) depends on the consumer’s subjective assessment of its usefulness and on the rarity of the good, which is revealed on the market. Therefore, value is a category of exchange. Not only labor, but also all factors of production participate in its creation.

K. Menger: “Differences in the relative subjective value of the same goods for different people are the cause of exchange.”

Neoclassical theory of value: combines marginal utility theory with cost theory.

Value is determined by the interaction of market forces lying on both the demand side (marginal utility) and the supply side (production costs, costs of production factors).

The work of A. Marshall is associated with a departure from attempts to build a monistic theory of value, that is, to find a single source of value and a single source of income in a market economy.

L. Marshall: “We could argue with equal grounds whether value is regulated by utility or by cost of production, as whether a piece of paper is cut by the upper or lower blade of a pair of scissors.”

The market organization of the economy is not the result of someone’s wisdom; it arose through the exchange of labor products of people who are able to produce them in limited quantities, but who need many products produced by other people.

Initially, the exchange was random in nature and had the form of a direct exchange of goods T-T. In economics, such an exchange is called barter.

Barter - This is a direct exchange of goods without the mediation of money.

Guinness Book of Records: In the history of trade, the largest barter transaction was the exchange of 36 million barrels of oil worth 900 million pounds. erased for 10 Boeing 747 aircraft purchased by the Royal Saudi Airlines in July 1984.

However, with the expansion of exchange, barter encountered serious difficulties, since it did not allow the owner of the goods to choose the goods he needed, the seller and the time of purchase, requiring many intermediate trade transactions.

Here is how, for example, one traveler describes his misadventures in Africa: “For crossing by boat, the boatman demanded ivory in payment. I did not have this, but I learned that Magomed ibn Salib had it and that he, in turn, needed clothes. I didn’t have it, but I found out that Magomed ibn Gharib had clothes and that he needed the wire that I had. I gave Magomed ibn Gharib the required amount of wire, for which he gave Magomed ibn Salib clothes, who, in turn, gave the required amount of ivory to its manager, Sai ibn Habib, after which I finally received a boat.”

Therefore, subsequently a commodity-money exchange arose, consisting of two asynchronous acts of sale and purchase C-D-T. It overcomes the limitations of barter through the use of money.

F. Braudel: “As soon as goods are exchanged, the babble of money is immediately heard.”

Guinness Book of World Records: World's Oldest Electrum Stater Coins of King Gyges of Lydia, Turkey, circa 670 BC. Uninscribed Chinese money from the Zhou Dynasty dates to around 770 BC.

Money also arose not as a product of an agreement between people, but as a result of their natural economic life, so money has a rich pedigree.

Even from this sketchy excursion into the history of money, it is clear that anything can be money, everything that is recognized by people as money. The main thing is that this tool performs the following functions: measuring the cost of goods (measure of value), payment during the exchange process (medium of exchange) and preservation of value for the future (a means of saving and accumulation). Therefore, it is correct to say that the essence of money is revealed in its functions.

The development of exchange and the emergence of money was caused by the growth of needs, so it would be futile to expect their satisfaction only from the subjective disposition of people towards each other.

A. Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their observance of their own interests. We appeal not to their humanity, but to their selfishness, and we never speak to them of our needs, but of their benefits.”

The exchange process acquires a market character, since it is carried out on mutually beneficial equivalent principles, relying not on people’s feelings, but on their rationalism.

A. Smith: “Every man thinks only of his own benefit, but the invisible hand that guides him, as in many other things, will lead him to a result that he himself did not even think about.”

The principle of the “invisible hand” of the market: the market mechanism is depersonalized (impersonal) in nature. Each of the disparate producers and consumers acts in pursuit of their own personal interests. The guideline for them is only an increase or decrease in prices, which leads to profit or loss.

However, as a result of these actions, a certain order is born and a certain correspondence between the structure of the social product and the structure of social needs is established. Market prices inform, coordinate, and motivate the behavior of market participants. The pursuit of individual gain leads to an increase in the wealth of the entire society and ensures the efficient distribution of limited resources.

Main elements of the market:

• 1) price;
• 2) supply and demand;
• 3) competition.

How are the main elements of the market related to each other?

Price changes are a guideline for producers when determining production volumes, i.e. supply, influence the choice of technologies and determine possible consumers at a given level of income.

A change in the relationship between supply and demand generates fluctuations in market prices around the equilibrium price, resulting in a price level at which demand becomes equal to supply.

If supply is greater than demand, then competition between sellers inevitably arises for the most favorable conditions for the production and sale of goods in order to maximize profits.

If demand is greater than supply, then buyers compete with each other, trying to purchase a scarce product and offering a higher price, and this, in turn, stimulates an increase in the supply of this product.

Market- is a system of economic relations based on the stable interaction of commodity and monetary circulation.

Market economy- a social form of economic organization based on commodity production and ensuring interaction between production and consumption through the market.

The evolution of social forms of production and economics has led to the emergence of a modern market system, which is based on the functioning socialized commodity production, that is, an economy that is focused on meeting the needs of society as a whole and individuals.

In modern conditions, the market has transformed from self-regulating to regulated, which has led to the complication of the subject-object structure of the market economy.

Subject-object structure- a market economy is a system of relationships between market entities, reflecting their goals, economic interests and forms of interaction regarding the objects of a market economy.

Subjects of market economy

• 1. Household
  • - ensures the reproduction of human capital;
  • - is the owner of any factor of production;
  • - strives for maximum satisfaction of his needs.

From this point of view, we are all households, since we sell some factor of production: we work and receive wages, we rent land or real estate and receive rent, we keep money in the bank and receive interest on capital, we are engaged in entrepreneurship and we make a profit. These types of factor income give us the opportunity to demand goods and services, that is, to become buyers. And since we all buy and sell, we are households.

• 2. Company is an economic unit that:
  • - uses factors of production to produce products for the purpose of selling them,
  • - strives to maximize profits,
  • - makes decisions independently;
• 3. Bank- a financial and credit institution that regulates the movement of the money supply necessary for the normal functioning of the market;
• 4. State represented by government agencies that exercise legal and political power to ensure control over economic entities and the market to achieve public goals.

Objects of the market economy: goods and services, labor, land, capital, money, securities, government benefits and subsidies, information, technology, social benefits, etc.

The modern market has not only a complex subject-object structure, but also numerous organizational forms. Markets can be classified according to various criteria: objects of purchase and sale, scale, degree of restriction of competition, nature of sales, industry characteristics, compliance with current legislation (legal and illegal market), etc.

Every entrepreneur must know in which market he operates, since his entrepreneurial strategy will depend on this.

Market classification

According to the economic purpose of objects of sale and purchase:

• market of goods and services;
• market for means of production;
• labor market;
• investment market;
• financial or money market;
• stocks and bods market.

By geographical location:

• local market;
• regional market;
• national market;
• world market;

According to the degree of restriction of competition:

• monopolistic market;
• oligopolistic market;
• free market;
• mixed market.

By industry:

• automobile market;
• computer market;
• oil market, etc.

By nature of sales:

• wholesale market;
• retail market.

By organizational form:

• bazaar, auction;
• fair, exchange, shop.

Market relations established in society have a huge impact on all aspects of economic life, performing a number of essential functions.

Market functions

• 1. Regulatory- regulation of social production is carried out through the market, i.e., the main issues of the economy are resolved. What to produce? - suggests the relationship between supply and demand. How to produce? - using the most effective technologies that reduce costs and increase profits. For whom to produce? - the manufacturer studies consumer behavior and offers the appropriate product. Who will produce? - the strongest and most competitive firms.
• 2. Mediation- communication between producer and consumer is carried out through the market. Each person is simultaneously both a buyer and a seller, selling goods, services, property or his labor on the market, and buying the products he needs for consumption or for the production of his goods.
• 3. Pricing- equilibrium prices are established on the market, i.e. prices at which the seller agrees to sell goods and the buyer agrees to buy them.
• 4. Information - Through market prices, information about market conditions, market expectations, and inflation processes is transmitted to buyers and sellers.
• 5. Stimulating - the market forces manufacturers to introduce new technologies and scientific and technological progress, save resources in order to reduce costs, increase profits and withstand competition.
• 6. Accounting- through the market, the costs of production are taken into account and compared with the result obtained.
• 7. Sanitizing - in the process of competition through the market, differentiation of commodity producers is carried out, i.e., efficient enterprises are developed, whose production costs are lower than market prices, and inefficient enterprises, whose costs are higher than market prices, go bankrupt.

The state of the Russian economy is often defined by the phrase “launch of the market mechanism.” In essence, the market mechanism of economic functioning is being recreated. For its successful and efficient operation, a number of conditions must be met:

• 1. Economic conditions:
  • - freedom to make economic decisions;
  • - responsibility for the results of economic activities;
  • - competition between producers;
  • - free pricing;
  • - no restrictions on the movement of goods, labor and capital.
• 2. Political conditions:
  • - democracy, i.e. a political system in which people, to some extent, participate in governing the country;
  • - stability of the political system, an opportunity for business to look ahead not 2-3 months, but 20-30 years.
• 3. Sociocultural conditions, that is, the ability of the population to accept the market and develop an appropriate model of behavior, because people’s adaptation to new economic conditions is always difficult.

The model for the development of a market economy in Russia must take into account, on the one hand, the modern characteristics of the market, and on the other hand, the special historical conditions of the country.

The economic science of a command economy rejected commodity-money relations and the corresponding forms of ownership, and the practice of developing the national economy was almost completely isolated from the world market. This determined the low efficiency and technical backwardness of the economy.

Another feature of domestic conditions is the destruction of natural and semi-natural economy, which, as the experience of developed countries shows, serves as a kind of buffer that mitigates many acute problems of the process of market formation (unemployment, shortage of food products).

The formation of market relations in our country is complicated by the fact that we are talking about a large-scale market (by territory, by population) with huge differences in the level of economic development, in labor productivity, and in income distribution.

The development of a market mechanism in our country is impossible without the active role of the state, the functioning of which we have extensive experience. In general, to develop and implement in practice the Russian model of market formation, the following is necessary:

• - ensuring freedom of economic activity;
• - the formation of a variety of forms of ownership of the conditions, means and results of management through the processes of denationalization and privatization;
• - development of competition among producers as the most important factor in stimulating entrepreneurial activity;
• - formation of a free pricing mechanism;
• - preservation, along with the spread of market relations, of a significant non-market sector of the economy;
• - consistent integration of the national economy into the system of world economic relations;
• - provision by the state of social guarantees to citizens, providing everyone with equal opportunities to earn money and support for disabled and socially vulnerable members of society.

From everything you have learned about the market, it becomes clear that the market, as a mechanism for the distribution and use of limited resources, has a number of obvious advantages.

Market advantages:

• 1) efficient allocation of resources;
• 2) flexibility, high adaptability to changing conditions;
• 3) freedom of choice and action of producers and consumers;
• 4) maximum use of scientific and technological progress;
• 5) the ability to satisfy various needs, improve the quality of goods and services.

However, it would be a big mistake to regard the market mechanism as ideal. It is no coincidence that economic history is full of examples of severe crises and even disasters that struck many countries, despite their centuries-old market traditions.

Negative sides of the market:

• 1) does not contribute to the conservation of non-renewable resources;
• 2) ignores the potentially negative consequences of decisions made;
• 3) does not create incentives for the production of goods and services for collective use;
• 4) does not guarantee full employment and stable price levels;
• 5) does not provide effective motivation for fundamental research in science;
• 6) subject to unstable development with corresponding recessionary and inflationary processes.

The solutions to the problems listed above are precisely taken by the state, whose role and functions in a modern market economy have changed significantly.

E. H. Carr: “We can no longer ask the invisible hand to do our dirty work for us.”

The market, without much exaggeration, is called the collective mind of humanity. Unfortunately, the market “thought process” is also not flawless. The way the market works is trial and error. And yet the market mechanism allows them much less than the wisest planners.

F. Hayek: “It is not the possibility of planning itself that is in doubt... but the possibility of successful planning.”

The reason is simple - the market allows the economy to flexibly adapt and quickly overcome dead-end situations, since decisions are made quickly and exactly where problems arise.

In addition, the market fully utilizes the personal interests of each of its participants, and these interests are a much more powerful lever than the most formidable orders. Humanity has not yet developed anything more effective.

CONTROL QUESTIONS

• 1. Name the general forms of economic organization.
• 2. What is the difference between natural and commercial production?
• 3. Describe the conditions for the emergence of a commercial economy,
• 4. What is a product and what are its main properties?
• 5. Expand the content of the labor theory of value and the theory of marginal utility.
• 6. What is the essence of the neoclassical theory of value?
• 7. How did the emergence of money overcome the limited possibilities of barter?
• 8. Name and expand the functions of money.
• 9. How does the principle of the “invisible hand of the market” manifest itself?
• 10. Name the main elements of the market.
• 11. What do you see as the relationship between them?
• 12. Give the most general definition of the market.
• 13. Name the subjects and objects of the market economy.
• 14. What is the reason for the complication of the subject-object structure of the market in modern conditions?
• 15. Give a classification of markets.
• 16. What functions does the market perform?
• 17. Expand the content of each of them.
• 18. Name the political, economic and sociocultural conditions for the effective functioning of the market.
• 19. What are the features and difficulties of the development of the market mechanism in Russia?
• 20. Name the characteristics of the market that can be considered its advantages.
• 21. What are its negative aspects?
• 22. What is the reason for the strengthening of the role of the state in a modern market economy?

TASKS AND EXERCISES

1. How do you understand the meaning and significance of this quote?

“The great virtue of the market is that it is itself

protects. If the prices of goods or certain types of payments deviate from the levels prescribed by society, the market sets in motion forces that return them to this level. Thus, a curious paradox arises: the market, which symbolizes the pinnacle of individual economic freedom, acts as the strictest guardian of all. You can appeal to the authority of the planning authority or enlist the support of a minister, but there is no one to complain to about the anonymous dictates of the market, no one to ask for support. Thus, economic freedom is much more illusory than it appears at first glance. Everyone has the right to act in the market as they please. However, if one chooses to do something that the market does not approve of, the price of individual freedom is economic ruin.”

Heilbroner R. “The Worldly Philosophers”

• 2. Compare the ways in which market and command economies try to cope with the problem of scarcity of economic resources? Complete the task in the form of a table.
• 3. Determine the correspondence between theories of value and their content:

ASSIGNMENTS FOR THE SEMINAR

• 1. Provide arguments for and against the thesis: “Democratic capitalism, and especially its aspect of allowing workers to own shares in their companies, refutes one of the most serious charges leveled against capitalism, that it is inherently exploitative.” (Johnson P. Making capitalism moral // America. 1991. No. 4).
• 2. Explain the essence of money from the position of its historical origin and from the position of its role in society. How do you understand the words of K. Marx: “The individual carries his social power, as well as his connection with society, with him in his pocket.”
• 3. What are the similarities and differences in the economic relations that develop between consumer and producer in the Central Market of your city, and those implied in the definition of “market”? How do market relations perform their functions using the example of the Central Market?
• 4. Describe and analyze your decision to obtain an economic education in market terminology. What price and non-price factors influenced this? Assess your role as a consumer in the education market. What will happen if, starting from the next academic year, all colleges in the country switch to paid education without any state subsidies?
• 5. There is a catchphrase that “Lincoln, with one stroke of his pen, destroyed a large part of the capital accumulated by the southern states.” Remember the story. What kind of capital is this, and was the economic system in the southern states a market one?
• 6. Analyze the models of transition to the market in Russia that you know. Which of them seems more promising to you?

TESTS

• 1. The conditions for the existence of commodity production are:
  • a) social division of labor;
  • b) availability of market and money;
  • c) economic isolation of producers;
  • d) the presence of surplus products.
• 2. A product is a product of labor intended for:
  • a) own consumption;
  • b) consumption by other persons;
  • c) exchange for other products in a certain proportion;
  • d) donations.
• 3. Money plays the role of a medium of circulation when:
  • a) purchasing goods on credit;
  • b) purchasing goods for cash;
  • c) placing money in a bank;
  • d) saving money to buy expensive things.
• 4. The distribution mechanism in a market economy is based primarily on:
  • a) the operation of the tax system;
  • b) the action of the law of supply;
  • c) competition;
  • d) the action of the law of marginal utility.
• 5. In an administrative-command economy, the question of what goods should be produced is decided by:
  • a) consumers;
  • b) state;
  • c) foreign investors;
  • d) producers.
• 6. Commercial farming is:
  • a) a farm in which advanced machinery and equipment are used;
  • b) a farm with a large production volume;
  • c) organizing the production of goods for sale;
  • d) organization of production of goods for own consumption.
• 7. The market organization of the economy has long served society because:
  • a) there are no shortcomings in it;
  • b) this is the system with the lowest production costs;
  • c) it overcomes monopoly;
  • d) all answers are correct.
• 8. The market organization of the economy is controlled by:
  • a) spontaneous impulses of economic processes;
  • b) individual, most successful entrepreneurs;
  • c) consumers and their demand for products;
  • d) economic laws that manifest themselves in the actions of people.
• 9. Direct exchange of one product for another:
  • a) is the most effective way of exchange;
  • b) opportunity costs;
  • c) called barter;
  • d) makes it necessary for the needs of the exchangers to coincide.
• 10. Any actions that connect the buyer and seller are called:
  • a) trade costs;
  • b) economic system;
  • c) exchange of property rights;
  • d) the market.
• 11. Solving basic economic issues through the market constitutes it:
  • a) information function;
  • b) regulatory function;
  • c) sanitizing function;
  • d) accounting function.

BLITZ SURVEY

• 1. Humanity lived the longest page of its history under a commodity economy.
• 2. Natural production is possible only with limited needs of society.
• 3. Economic isolation of producers means the isolation of their production.
• 4. Any product is a commodity.
• 5. Barter involves the intermediation of money.
• 6. The labor theory of value explains value by the utility of a thing.
• 7. The founder of the theory of marginal utility was D. Ricardo.
• 8. Neoclassical theory of value combines the labor theory of value and the theory of marginal utility.
• 9. Money appeared as a result of the development of exchange.
• 10. Market subjects are goods and services.
• 11. Labor is not an object of market relations.
• 12. Through the market, communication between producers and consumers is carried out.
• 13. Establishing the equilibrium price is the accounting function of the market.
• 14. The market guarantees full employment and a stable price level.
• 15. The market promotes the maximum implementation of scientific and technological advances.
• 16. The market leads to differentiation of producers.
• 17. In a market economy, the state controls prices.
• 18. The economy of modern Russia is characterized as transitional.
• 19. In a market economy, the main incentive is to maximize the income of an economic entity.
• 20. A market economy is characterized by free pricing.
• 21. In reality, the state participates insignificantly in the economic life of society.

BASIC CONCEPTS

Barter

Government regulation Money

Household Corporate economy Exchange value Subsistence production Market objects Use value Enterprise Market

Market economy

Social market economy

Price

Market structure

Market subjects

Product

Commodity production

LITERATURE

• 1. Berdyaev N. Origins and meaning of Russian communism. M., 1990. Ch. 5.6.
• 2. Galkin A. and others. Capitalism today: paradoxes of development. M.: Mysl, 1999.
• 3. Grebnev L.S., Nureyev R.M. Economy. Fundamentals course: Textbook for universities. M.: VITA, 2005. Ch. 4.
• 4. Dobrynin A.I., Zhuravleva G.P. General economic theory: Textbook. St. Petersburg: Peter, 2004. Ch. 5.12.
• 5. McConnell K.R., Brew S.L. Economics. TL. M.: INFRA-M, 2002, p. 81-91,47-48.
• 6. Samuelson P. Economy. M.: Algon VNIISI, 2002. T. 2, chapter 2.
• 7. Theory of transition economy: Textbook / Ed. Nikolaeva I.P. M.: UNITY-DANA, 2004.
• 8. Hayek F. Detrimental arrogance. M.: News, 1992. Ch. 1, 3, 5.
• 9. Heine P. Economic way of thinking M.: News, 1991, p. 441-448.

ABSTRACT TOPICS

• 1. The historical process of development of commodity production and exchange.
• 2. The path to the revival of the German economy by Ludwig Erhard.
• 3. Russian model of market formation.

Market (market) is a system of relations in which connections between buyers and sellers are so free that prices for the same product tend to quickly equalize.

The market is, first of all, a meeting place for sellers and buyers; an exchange is carried out between them at a price that was agreed upon. In this case, there is a voluntary alienation of one’s property and the appropriation of someone else’s. Therefore, the market means the mutual transfer of property rights. To complete the transaction you must There are also costs associated with searching for information, negotiating, determining the qualitative and quantitative characteristics of the purchased product or service, specification and protection of property rights, concluding a contract, etc. Therefore, the market can be defined as a set of transactions (from the English transaction - deal) . During the exchange, a kind of accounting and public assessment of the goods sold occurs.

The market acts as a specific form of relationship between producers isolated within the framework of the social division of labor, each of whom operates independently, at their own peril and risk. Social needs are identified through a price system. They convey information that serves as an incentive to apply the most economical methods of production and make the most efficient use of limited resources. Thus, the market contributes to the redistribution of income in favor of better economic entities that use advanced technology and high-quality resources. In a developed industrial society, the market is not an area where individual buyers and sellers meet by chance, but a social mechanism that provides constant communication between producers and consumers of economic goods. Wholesale buyers and sellers play an important role in equalizing supply and demand and establishing equilibrium prices.

The breadth of coverage varies between local, national and international markets. The object of purchase and sale may be consumer goods or resources; Accordingly, markets for consumer goods and services and markets for resources (labor, land, capital, entrepreneurial abilities, information) differ. Along with the commodity market, there is a money market. Prices on the market can develop both during the buying and selling process and before it. We are more often faced with such goods and services, the prices for which are set in advance. Prices on the market can be formed in the process of both personal and impersonal contact.

Microeconomics as a branch of economic science covers a wide range of issues and problems of interaction between individual economic entities, and also studies their behavior in various markets. Microeconomics considers issues of optimizing production volumes and its costs, resource consumption and their distribution, profitability, etc.

To study these problems, it is necessary to master economic scientific tools: the methodology and methods of microeconomics.

The modern methodological basis of microeconomics, in addition to the general scientific principles of dialectical materialism, also includes specific ones:

Priority of needs as the engine of production;
limitlessness of needs;
limited resources;
behavior of business entities based on rationality and personal gain.

Thus, limited resources, not allowing to simultaneously and completely satisfy all needs, poses before each economic entity the problem of choice (goals, directions, ways of using limited resources for the most profitable investment of capital).

The rational behavior of economic entities is based on the characteristics of human nature (the tendency to increase well-being, competition, exchange, justice, etc.), which organically correspond to the requirements, first of all, of maximizing profits and minimizing costs.

In modern economic science, two approaches to the study of economic phenomena have been established: positivism and normativism.

Proponents of the positive approach study economic phenomena by analogy with the natural sciences, relying on actual facts, their generalization, establishing cause-and-effect relationships, and general patterns of a particular phenomenon. One of the principles of this approach is verification (proof, testing) of a theory or hypothesis, its partial or indirect confirmation in practice. In case of contradiction, the theory is rejected or a new one is developed.

Proponents of the normative approach deny the need to analyze real facts by analogy with the exact sciences. They believe that economic processes are influenced by social, political and other factors, in the assessment of which experience, knowledge, beliefs, i.e. subjectivity, play a significant role.

The normative approach involves assessment, formulation of recommendations regarding a specific phenomenon, and is associated with the development of ideas about what the economy should be like.

In the course of problems "Economics" synthesis, induction, deduction, scientific abstraction, as well as mathematical tools are widely used.

The main microeconomic processes are modeling, i.e. the study of objects of knowledge not directly, but indirectly, through the analysis of some auxiliary objects, which are called models.

As a rule, sign modeling (formulas, graphs) is used.

In microeconomics, two types of models are used: optimization and equilibrium.

When studying the behavior of individual economic objects, optimization models are used (based on marginal values: marginal utility, marginal product, marginal costs, marginal income, etc.).

Equilibrium models are used to study the relationships between economic entities. Using these models, it is possible to study the state of the economy in conditions of balance of interacting forces and disruption of the equilibrium state. These models are used in the study of prices, inflation and their impact on the basic vital indicators of business entities.

Note that not all economists are adherents of mathematical methods when analyzing economic phenomena expressed in algebraic, tabular or graphical form. Thus, the 1988 Nobel Prize winner in economics M. Allais and other scientists believe that excessive mathematization in the Economics course takes research into the realm of abstractions, separating it from real life. However, as we will see later, all three current forms of studying economic phenomena are capable of clearly characterizing the connection between economic phenomena. Graphs are especially widely used.

The economic activities of economic entities are connected with markets.

The market includes a set of forms and methods for organizing cooperation between sellers and buyers, their interaction on the basis of emerging conditions, in which some can sell profitably, while others can buy profitably. At the same time, the mechanism of market economics forces everyone to do what is beneficial to everyone and society as a whole.

Thus, in a market economy, economic decisions are made decentralized, that is, in the presence of:

Freedom of choice for buyers and sellers;
developed;
competitive environment.

An integral part of the effective functioning of a market economy and an objective consequence of limited resources and freedom to solve basic economic issues:

What to produce?
how to produce?
at what price to sell?

Competition is the economic struggle for consumers and the most profitable areas for using capital.

There is a distinction between perfect (pure) and imperfect competition (,). In the field of marketing activities, competition is divided into functional, specific, subject, industry and multi-industry. At the same time, there are two main methods of competition: price and non-price.

Different market situations mean different prices. Depending on the state of the competitive environment, market or monopoly prices are established. Comparison of prices in different time periods requires dividing them into basic, current, comparable (real), etc.

Price setting is one of the main elements of the market mechanism, through which the actions of all economic entities are coordinated, taking into account everyone’s ideas about their own benefit.

The price and volume of products produced are the main microeconomic indicators.

The mechanism for setting market prices is formed under the influence of supply and demand.

The volume of a specific product (service) that an individual buyer (group, society) is willing and able to purchase is called the quantity of the product for which demand is presented, or the quantity demanded (QD). Demand is considered for a specific period (day, week, month, year) and a certain number of buyers.

Demand is formed under the influence of various factors:

Prices of goods or services;
taste of buyers;
consumer income;
distribution of income among resource owners and consumers;
prices for substitute goods;
the total number of buyers of this product (service);
inflation expectations.

When analyzing demand, we proceed from the constancy of all factors and changes in what is being studied. For example, when studying the influence of price on demand, income, tastes, the number of buyers are left unchanged, etc.

A demand curve is a graphical expression of the dependence of the price of a product on the volume of demand for it.

The demand curve expresses the law of demand, the essence of which boils down to the following: if the factors affecting the volume of demand (QD) are constant, then with an increase in the price (P) of a product, the demand for it will decrease. An increase in the volume of demand under the influence of another factor will cause the demand curve (D) to shift to the right (Ј*i), and a decrease in the volume of demand - to the left (D2).

The second component of the market price is supply (the number of goods produced and offered for sale).

The amount of a good that producers are able and willing to produce in a given period of time is called quantity supplied, or quantity supplied (QS),

The relationship between price and supply is graphically represented by the supply curve (S). Supply curve is a graphical expression of the dependence of the price of a product on the quantity offered for sale.

The supply curve expresses the law of supply: the higher the price of the product (service) offered, the more of this product will be offered, since with an increase in price, at constant costs, the manufacturer’s profit increases. In practice, the action of the law of supply causes the flow of capital from less profitable industries to more profitable ones, changing the structure of the economy.

Other factors also influence supply volume:

Production technology;
price for ;
number of commodity producers;
taxes and subsidies.

With an increase in the volume of production (supply) under the influence of any of the factors or their combination, the supply curve (S) shifts to the right (Si), and with a decrease - to the left

A shift in the supply curve to the right means an increase in the supply of goods, to the left means a reduction in production and a decrease in supply.

The influence of the volume of supply and demand on the price of a product is explained by the search for the optimal price that is beneficial for the seller and the buyer.

The price at which the quantity of a good supplied on the market is equal to the quantity of a good demanded is called the equilibrium price.

The equilibrium (market) price is established gradually. If purchase and sale occurs at other than market prices, a shortage or excess of goods is formed. This leads to a change in price, which will change until it is established at the optimal level.

An excess of supply over demand causes a decrease in price (overproduction zone), and an excess of demand over supply causes an increase in price (scarcity zone).

In both the first and second cases, the market mechanism will correct disequilibrium prices, exerting pressure on them from both above and below, level the situation and establish an equilibrium price.

With an increase in demand, a new equilibrium price (higher than the previous one) and the corresponding volume of goods will be established. As demand decreases, the equilibrium price and equilibrium quantity of the good will decrease.

An increase in supply entails a decrease in the equilibrium price and an increase in the equilibrium quantity of the good. As supply decreases, the equilibrium price will increase and the equilibrium quantity of the good will decrease.

Thus, the equilibrium price can be established for any changes in supply and demand. It is a compromise between buyer and seller (supply and demand). It is this price level (at which the transaction took place) that provides information on possible prices for today and tomorrow as a guideline for producers.

Depending on the competitive environment, supply and demand influence pricing differently. In a competitive environment, prices are formed relatively freely, while a monopoly creates conditions for price dictates from both the producer and the consumer.

Failures in the pricing mechanism give rise to shortages, overproduction crises, inflation, imbalances in the economic structure and other negative phenomena that reduce purchasing power and affect the state budget.

5. Concept of the market

In the most general terms market is a system of economic relations that develop in the process of production, circulation and distribution of goods, as well as the movement of funds. The market develops along with the development of commodity production, involving in exchange not only manufactured products, but also products that are not the result of labor. Under the dominance of market relations, all relationships between people in society are covered by purchase and sale.

More specifically, the market represents the sphere of exchange (circulation), in which communication is carried out between agents of social production in the form of purchase and sale, i.e. connection between producers and consumers, production and consumption.

Market subjects are sellers and buyers. Households (consisting of one or more individuals), firms (enterprises), and the state act as sellers and buyers. Most market participants act simultaneously as both buyers and sellers. All economic entities interact closely in the market, forming an interconnected “flow” of purchase and sale.

The objects of the market are goods and money. Not only manufactured products, but also production factors (land, labor, capital), and services act as goods. Money is all financial means, the most important of which is money itself.

The economic mechanism of the market model of economic development consists of three main elements: supply, demand, price. Along with these elements, there is something that acts as a catalyst, a “perpetual motion machine”, a breeding ground for the life of the market - competition.

The essence of competition is manifested in the freedom to choose economic decisions in conditions of competition for maximizing personal gain. In a competitive market economy, the market performs 3 main functions:

1) consistent balancing of supply and demand in terms of volume and structure;

2) establishing an equilibrium price, i.e. supply prices at a level reflecting the social significance of the goods produced or services offered;

3) creation of prerequisites (through a competitive environment) for the constant desire of market entities to increase the economic efficiency of their activities.

The market as an independent entity includes three main elements: the market for goods and services, the labor market, and the capital market. All these three markets are organically interconnected and influence each other. The development of the market and market relations depends on the development of all its components.

The most important condition for the emergence of a market is social division of labor. Through the division of labor, an exchange of activities is achieved, as a result of which a worker of a certain type of specific labor gets the opportunity to use the products of any other specific type of labor.

An equally important condition for the emergence of a market is specialization. Specialization- a form of social division of labor both between various industries and spheres of social production, and within an enterprise at various stages of the production process.

An important reason for the emergence of a market is natural limitation of human production capabilities. Even the most capable person can produce only a small amount of good. Not only human production capabilities are limited in society, but also all other factors of production (land, technology, raw materials). Their total number has limits, and use in any one area excludes the possibility of the same production use in another. In economic theory, this phenomenon is called law of limited resources. Limited resources are overcome by exchanging one product for another through the market.

The reason for the formation of the market is the economic isolation of commodity producers so that they can freely dispose of the results of their labor. Benefits are exchanged by completely independent producers who are autonomous in making economic decisions. Economic isolation means that only the manufacturer himself decides what products to produce, how to produce them, to whom and where to sell them. An adequate legal regime for the state of economic isolation is the regime of private property. The exchange of products of human labor primarily presupposes the existence of private property. With the development of private property, a market economy also developed. Private property and market relations reached their highest level under capitalism. Private property objects are diverse. They are created and increased through entrepreneurial activity, income from running their own household, income from funds invested in credit institutions, shares and other securities.

(Materials are based on: E.A. Tatarnikov, N.A. Bogatyreva, O.Yu. Butova. Microeconomics. Answers to exam questions: Textbook for universities. - M.: Publishing House "Exam", 2005. ISBN 5- 472-00856-5)

Return