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Introduction to Microeconomics: Understanding Market Economy January 17, 2015

Posted by OromianEconomist in Economics, Uncategorized.
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“Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy.”

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Economics Basics: Supply and Demand

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy.

Market Economy is a system largely determined by  free enterprise. It is a system in which decision regarding investment, production and distribution are based on supply and demand, and prices of goods and services are determined in a free market and free price system. Markets determines the allocation of resources and economic resources are privately owned.

Market is made up of people, consumers and entrepreneurs, attempting to buy and sell on the best term possible. Through the grouping process of give and take, they move from relative ignorance about others’ wants and needs to a reasonably accurate understanding of how much can be bought and sold at what price. The market function as an ongoing information and exchange system.

A free market is…

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