To help you understand how the market works, let me first explain the concept itself. In economic terms, a market is a meeting point between a seller and a buyer, where goods and services are exchanged.

The market has four basic functions, i.e. information, allocation, balance and acceptance of goods and services. Now I will explain the functions one by one.

Informative - Each market is a collection of information for buyers and sellers. The seller will receive information about the demand for the goods or services, and the buyer will get data about the quantity and prices of the goods that are offered on him.
Allocative - there is an allocation process in the market, i.e. the allocation of resources between those applications that bring the greatest profits and are most effective.
Equilibria—a market that balances the level and structure of supply, demand, and price by informing buyers and sellers about the particular parameters of demand, supply, and price levels.
Acceptance of goods and services - Thanks to this function, the value of the products produced and the services provided is determined.

Jak działa rynek?