1. Markets and Trade

2. What’s an example of a market that you’re familiar with?

3. Any place where buyers (consumers) and sellers (producers) meet.
What are markets?
Any place where buyers (consumers) and sellers (producers) meet.

4. Does this have to be a physical place?
No…most markets now exist only on the internet.

5. How are markets determined?
Markets are determined by two different categories. Price and all other factors.
This means that price is the most important determinant in a market.
***Prices serve as a signal to BOTH producers and consumers!!!***

6. Trade
It is in EVERYONE’S best interest to trade, as long as the following two things are true:
People must be willing to trade (Voluntary Exchange)
Trade must be beneficial for all parties
Specialization can only occur when people are willing to trade.