Market As Form of Organization of Economic Activity of Society

MARKET AS FORM OF
ORGANIZATION OF ECONOMIC
ACTIVITY OF SOCIETY
1. Market essence.
2. Functioning of market mechanism.
3. Market structure.
4. Market of perfect competition.
5. Monopolization of market, types and types of
monopolies.
6. Perfect monopoly.
7. Firm in the conditions of monopolistic competition.
8. Conduct of firm at the oligopoly market.
 A market economy is the difficult multilevel, structured system,
functioning on contractual relations between its subjects. Classic
presentation of main principle of market economy is principle of
laisse faire, laisse passer, that in translation from French means
«let goes as goes».
 Adam Smit formed this principle in the followings words: «To
heave up the state from the lower stage of barbarism to the heights
of welfare, easy taxes and tolerance are needed only fairly in a
management. All other will do the natural course of events».
 Other fundamental principle is a competition. Moreover, term
 a «market» can be replaced by a concept «competition». There is
not a competition, there is not a market. It is thus necessary to
remember that competition no less difficult concept. It evolves
together with a production and market. A classic market is a
perfect (clean) competition, rather ideal, what the real process. A
modern market is an imperfect competition in its specific forms,
formative and different structures.
Market description
FORM
ORGANIZATIONS OF
FUNCTIONING OF
ECONOMY
(MARKET ECONOMY)
Sphere of appeal
Form of motion of Type of economic An independent

the combined subsystem is in the
public product connections economic system
Market as system
Variety of patterns
of ownership and
management forms
Freedom of of
enterprise is
Limited role of the freedom of choice
state in adjusting of of economic
economic processes partners, that, as,
how many and for
whom to produce.
Access of market
subjects to complete
Competition of
market state
commodity
information the
producers
economic state of
affairs
Freedom of market
subjects to
determine prices on
goods and services
in accordance with
the accepted
legislation

 Thereby a market is the system of economic
relations between people, enterprises, states,
leanings foremost against principles, in
obedience to which all in the world is for sale
and bought, exchanged on free basis, without a
compulsion, but with the observance of rules of
closeness.
 Market participants it is been: businessmen, workers, eventual users,
proprietors of loan capital, owners of securities et cetera
 The basic subjects of market economy it is accepted to subdivide into 3 groups:
 housekeepings;
 business ( businessmen );
 government.
 Housekeepings are a basic morphon, functioning to the consumer sphere of
economy. It can consist of 1 or more than persons. Housekeepings are owners
and suppliers of factors of production in a market economy.
 Business is a business enterprise, functioning with the purpose of receipt of
profit (arrived ), is the supplier of commodities and services in a market
economy. ( investment in business of property or loan asset, a profit is expended
not simply on the personal consumption, but for expansion of production
activity.)
 Government – it is presented by different budgetary organizations, which not
receipts have arrived for an object to it, but will realize the functions of
government control of economy.
 Informative function. A market is the open
system, in which producers, buyers and
salespeople, accept responsible decisions on the
fear and risk. But their conduct, their choice, is
built on the basis of information, coded in
prices.
 A regulative function is continuation of the
first, because rational allocation of resources
( labour, capital, natural, financial ) is largely
related to solvent demand of market subjects,
and consequently, with prices on goods and
services, by the structure of a sentence and
demand.
 Stimulant function – closely related to the first
two, rendering the influence on them. A
market rewards those the subjects, which
choose the most rational methods of the use of
the limited resources, front-rank technique and
technology, labouring for on this basis
upgrading, decline of costs, growth of income.
 Integrating function – on the basis of co-
operation of first three a market takes away
from all aggregate of the decisions of market
subjects isolated, individualized, independent
most effective, optimum, proper to the market
laws, decision.
 His role in the process of public reproduction, which is
taken to the following, follows from essence of market
and his functions:
 To give out a signal to the production: that, in what
volume and what structure it is not necessary to produce;
 To counterbalance demand and supply, provide balanced
of economy;
 To differentiate the profits of commodity producers in
accordance with efficiency of their work and reliability on
coverage of market спроса4
 Washing of noncompetitive enterprises and rolling up of
out-of-date productions.
 If a condition of MR=MC is a point of
equilibrium of firm, I.e. arrived at максимум
arrived at the optimum volume of products,
consequently, the optimum volume of products
is arrived at on condition of R=MS or
MR=Р=МС

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MARKET AS FORM OF

Form of motion of Type of economic An independent

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