ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The market establishes the prices for goods and other services. These rates are determined by supply and demand. Supply is created by the sellers, while demand is generated by buyers. Markets try to find some balance in price when supply and demand are themselves in balance.

Detailed explanation-2: -Market economies work using the forces of supply and demand to determine the appropriate prices and quantities for most goods and services in the economy.

Detailed explanation-3: -In a market economy, the decisions are made by the producers and consumers. The government intervenes minimally in the market and does not make any decisions about what is produced or how it is produced.

Detailed explanation-4: -In the product market, households act as buyers purchasing the goods and services businesses are willing to sell. In the resource market, the roles are reversed with businesses paying households for their resources: land, labor, capital and entrepreneurship.

Detailed explanation-5: -In the factor market, businesses are the buyers. They may buy, rent, or hire raw materials, land, or labor. Whatever a business needs in order to build, package, and deliver the products or services they provide must be obtained in the factor market. The sellers include producers of raw materials.