Market and Market Relations

market - ринок

to transact - укладати угоду

buyer - покупець

seller - продавець

business - торгівельно-промислова діяльність

customer- покупець, замовник

brand - товарна марка, товар

market relations - ринкові відносини

product, goods, item - товар(и)

to produce - виробляти

money votes - грошові голоси

consumer- споживач consumer

votes - рішення споживачів

price - ціна

amount - кількість

demand - попит

supply - пропозиція

business cost, costs of production - витрати виробництва

broker - маклер

commodity market - товарна біржа

go-between - посередник

competition — конкуренція

physical efficiency - ефективність виробництва за фізичним обсягом продукції

cost efficiency - ефективність виробництва у вартісному вираженні

to meet price competition - витримати цінову конкуренцію

tо maximize profit - підвищити прибуток до максимуму

keep costs at a minimum - знизити витрати до мінімуму

to purchase — купувати

labour - праця

to incur losses - зазнати збитків

market for productive services - ринок виробничих послуг

wage rate - ставка заробітної плати

land rate - земельна рента

interest rate — ставка відсотка

income - доход

resulting distribution of income - кінцевий розподіл доходу

initial distribution of property - первинний розподіл власності

acquired (inherited) ability - придбане (успадковане) право

business enterprise - торгівельно-промислове підприємство

retail market - роздрібний ринок

insurance company— страхова компанія

family breadwinner— годувальник сім'ї

luxury - розкіш

privation - злидні

to pay - платити

laissez faire (French) - політика мінімального втручання уряду в економіку

taxation – оподаткування

The dictionary tells us that a market is a place where buying and selling take place, and this is the meaning normally attributed to the term. It is also used to describe the volume of business transacted by buyers and sellers. The elementary, but very important, basic point is that markets are made up of people who become customers, and the extent and value of a market are determined by the willingness of customers to spend their money on the brands and products in the market. Market relations involve the triad of fundamental economic problems: What, How and For Whom goods are produced. 1. What things are produced is determined every day by the money votes

of consumers in their decisions to purchase this item and not that. The money votes of people affect prices of goods, those prices serve as guides for the amounts of the different goods to be produced. But consumer votes do not determine what to produce by themselves. Demand has to meet with a supply of goods; so business cost and supply decisions along with consumer demand, do help to determine What. Just as a broker may help arrange a match between buyer and seller, the auctioneer in the commodity market acts as the go-between who reconciles the consumer votes and business supplies that impinge on the market.

2. How things are produced is determined by the competition of different producers. The method that is the cheapest at any one lime, because of both physical efficiency and cost efficiency will displace a more costly method. The only way for producers to meet price competition and maximize profits is to keep costs at a minimum by adopting the most efficient methods. For example, the large tractor-operated farm will displace the family-size farm if this leads to lower costs of production. Market relations demand that businessmen should find the cheapest method of production using labour, land and other factors that are relatively cheap and economizing on the use of relatively expensive factors; otherwise, they will incur losses and be eliminated by ruthless competition.

3. For Whom things are produced is determined by supply and demand in the markets for productive services: by wage rates, land rents, interest rates and profits, all of which go to make up everybody's income-relative to everyone else and relative to the whole. Of course, the character of the resulting distribution of income depends upon the initial distribution of property, upon acquired or inherited abilities, educational opportunities, etc.

Markets serve as the connecting device between the public and business. The consuming families face business enterprises on two fronts, with only prices in between. One front is the retail market on which consumers buy thousands of small items from a score of different retail establishments: grocery, drug and department stores; movie theatres; gasoline stations; and from electric power companies post offices, railroad lines and insurance companies. On the other front - the market lor labour and other productive services-relations are not always so peaceful. To the family breadwinner his wage is not simply another price; it is the difference between luxury and comfort, between comfort and privation.

Functionally, market relations are doing what they are designed to do -putting goods in the hands of those who can pay the most, who have the most money votes. Quite possibly it is bad from ethical viewpoint, but not from the standpoint of what the market mechanism is alone geared to accomplish. Defenders and critics of the price mechanism should recognize this fact. And when a democratic society does not like the distribution of money votes under laissez faire, it uses redistributive taxation to rectify the situation.

QUESTIONS AND TASKS

1. What are the key factors involved in market formation?

2. Why do consumer votes alone fail to determine what should be produced?

3. What is meant by competition? Do you regard competition as integral part of market economy?

4. What do you think of the ethical aspect of market relations? Provide examples to illustrate your opinion.

5. What is your attitude to laissez faire policy?

6. You are a manufacturer who wants to succeed in business. Work out business strategy to win in the marketplace.