What are Markets?

Most people are confused as to what a market is.  They see it either as a place one goes to buy stuff (e.g. a mall or bazaar) or as Wall Street.  While both certainly are kinds of markets, they are not the only kinds.

Simply put, a market is just the term we use to describe the exchange of goods/services/ideas between two or more people.  That’s it.  The stock market is a market as people buy and sell shares of companies, but we also have a market when two schoolkids trade baseball cards.  In fact, the Internet is full of markets: Craigslist, eBay, Amazon, forums, WordPress, etc etc etc.

Markets allow for the co-ordination of buyers and sellers.  In this manner, they allow goods/services/ideas to go to where they are most valued.  Therefore, both parties in a market benefit as each one obtains an item s/he values more than what s/he trades away.  Thus, wealth is created.

It really is this simple.

One thought on “What are Markets?

  1. I like the idea of covering the basics. Laying the foundation for further exploration into economics. My fascination with economics has been the explanations guiding some of Man’s choices, in the present and in the past.

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