The Market Mechanism and its Elements

The interrelation and interaction of the most important market elements that offer supply, demand and price form a market mechanism. The market mechanism and its elements are designed to meet the needs of society. To meet these needs, resources that are limited are needed. In this regard, you have to choose the best option for their use.

The market mechanism and its elements are designed to meet the needs expressed through demand. Some social needs can not be expressed through demand, these are so-called public goods. These include ensuring public safety, a unified energy system, national defense, etc.

The market mechanism and its elements are closely connected with the price, which is the main instrument that influences supply and demand. Most of the needs of the population are met through demand, which depends on many factors. It can be advertising, fashion, changing the tastes of customers. It is necessary to take into account that the buyer purchasing the goods wants to save, as the wages of the population are not high. This means that the quantity of goods purchased depends on the price. The high price, as a rule, reduces demand, and its low increases. The fluctuation of prices for wholesale does not have a significant effect on the demand of the population. The demand is mainly influenced by retail prices.

Demand and supply not only depend on the price, they influence each other and directly, regardless of the price. Supply in the market generates demand, and the growth in demand, in turn - the supply of goods.

Demand - the need of the population for a product or service and the desire to buy it for a certain price.

Offer - the provision for the purchase of certain goods that are in demand.

Price is the actual ratio of supply and demand.

The economic situation of consumers and producers depends on the market situation. They should be guided in the conduct of their activities

Parameters of the market, that is, demand, supply and price.

Market conditions are understood as a set of economic conditions that are currently being formed, affecting the economic activities for the sale of goods and the implementation of services. Economic conditions include: the level of prices, the ratio of supply and demand, the solvency of consumers, the market capacity, the state of commodity stocks, etc. The market mechanism and its elements must be known in order to carry out its economic activities. It is necessary to understand the laws that underlie its use. These are laws: demand and supply, falling demand, cost and utility, competition, changes in supply, profit, etc. Laws are realized through different types of prices: equilibrium, equivalent exchange, discriminatory, monopoly, zonal, etc.

Market management mechanism in Russia.

In the event that the market remains uncontrolled, it is not regulated by the state, then there is a stratification of the population according to the material situation, there are no social guarantees, there can be monopolization of the market, as well as a number of other negative aspects, since the market economy is directed first of all To make a profit.

The state takes upon itself the functions to counteract negative phenomena that may occur, and uses for this purpose all possible effective mechanisms and means. There should be a correlation of the market mechanism and state management, in which the state needs to ensure the custody of the market mechanism.

Market mechanism of revenue generation

Incomes of the population are indicators of the social and economic well-being of society. As a result of their functional distribution, wages, profits, rents and interest are formed. Functional distribution is the ratio of income from labor and property.