Role of the Market

• Product Markets


  Where and how goods and services are bought and sold
• Factor Markets


  Where FoP are bought and sold
• Importance of Relative Price


  the interaction between demand and supply determines the equilibrium price in markets
• Determining Solutions to the Economic Problem


  Buyers and sellers try to get the best deal, also achieving the most efficient outcome for society.

  • Ensuring goods and services are available to these consumers who value them the most
  • Only the lowest cost procedures are supplying the goods and services available