The term ‘market’, as used by economist, is an
extension of the ancient idea of a market as a place where people ghater to buy
and sell goods. In former days part of a town was kept as the market or
marketplac, and people would travel many kilometers on special marketdays in
order to buy and sell various commodities. Today, however, market such as the
world sugar market, the gold market and the cotton market do not need to have
any fixed geographical location. Such a market is simply a set of conditions permitting
buyers and sellers to work together.
In a free market, competition takes place among
sellers of the same commodity, and among those who wish to buy the commodity.
Such competition, influences the price prevailing are also affected by current
supply and demand.
Whenever people who are willing to sell a commodity
contact people who are willing to buy it, a market for that commodity is
create. Buyers and sellers may meet in person, or they may communicate in some
other way: by letter, by telephone or through their agents. In a perfect
market, communications are easy, buyers and sellers are numerous and
competition is completely free. In a perfect market there can be only one price
for any given commodity: the lowest price which sellers will accept and the
highest which consumer will pay. There are, however, no really perfect market,
and each commodity market is subject to special conditions. It can be said
however the the price rulling in a market indicates the point where supply and
demand meet.
Question :
5. Why
prices inevitably fluctuate?
6. In
what condition is a market created ?
Answer :
5. The prices
inevitably fluctuate because fluctuations are also affected by current supply and demand.
6. Condition is
a market created when people who are willing to sell a commodity contact
people, who are willing to buy it.
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Herdila Septiaruwina (14214930)
M.Harits Azzindani (17214296)
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Sukini Nihardja (1A214499)
