Glamor Economics

Chapter 14

Chapter 3 A Fair and Voluntary Game—Markets and Market Activities
Section 1 Commercial civilization born of exchange - the emergence of the market
The research on the market is an important entrance for us to enter the palace of economics.It can be said that without the market, there would be no highly developed commercial civilization.So how did the market emerge?What changes has its appearance brought to human society?

In ancient times, there were no commodities and no markets.Human ancestors lived by hunting.Because hunting tools are very primitive, the captured prey is often not enough to eat, so the prey is distributed uniformly by the tribe.Later, a clever young man in the tribe invented the bow and arrow, and more prey were captured.But the bow and arrow maker did not get as much food from hunting himself as he made a bow and exchanged it with others, so he simply stopped participating in hunting and devoted himself to making bows and arrows and exchanging food with others.As a result, division of labor and exchange emerged in the tribe.Later, with the expansion of the division of labor, some people who made other items appeared, and like this smart young man, they exchanged the items they made for what they needed.

This is Yan Dang?A story told by Smith in The Wealth of Nations.We can see that with the development of the division of labor and exchange, the market gradually appeared.

"Book of Changes" said: "Sunday and China are the market, call the people of the world, gather the goods of the world. Trade and retreat, everyone gets what they want and the goods pass." This is the scene of bartering.It means that a market is formed at noon, and a lot of goods in the vicinity are gathered together, people come to exchange, each trades and leaves, and everyone gets what they need. The ancient life scenes depicted in "Book of Changes" are the embryonic form of the market.

The market is a phenomenon unique to the commodity economy, and there will be a market wherever the commodity economy exists.The market system is a complete system composed of various professional markets, such as commodity service market, financial market, labor market, technology market, information market, real estate market, cultural market, tourism market, etc.At the same time, each professional market in the market system has its own special functions, they are interdependent, restrict each other, and work together on the social economy.

From the perspective of market behavior, it has two prominent features, one is equality and the other is competition.Equality refers to mutual recognition that the other party is the owner of its products, and social recognition is given to the labor it consumes through the form of value.The equality of market behavior is based on the law of value and the principle of equivalent exchange. It does not contain any class attributes. It denies privileges and ranks in economic activities, provides important equal conditions for social development, and promotes commodity economy. Under the conditions of rational flow of resources.The competitiveness of the market comes from the free transfer and flow of factor resources, which is manifested as survival of the fittest, rewarding the good and punishing the bad.Market competition is conducive to improving production efficiency and making rational use of factor resources.

[links to related words]

A buyer's market refers to a market in which transactions are controlled by buyers, that is, the market operates under the control of overwhelming buyer power.

A seller's market refers to a market in which transactions are controlled by sellers, that is, the market operates under the control of overwhelming sellers.In a seller's market, the seller occupies a dominant position, while the buyer is in a passive position and usually has to compete for the purchase of goods.For example, in a period of commodity shortage, the steel market is a seller's market, and buyers who want to buy steel often have to endure the harsh conditions of the other party.

Market share, also known as market share, refers to the proportion of a company's sales in the total market sales.The higher the market share, the stronger the competitiveness of the enterprise, the greater the acceptance of the product by consumers, and the greater the sales revenue of the enterprise.Therefore, maintaining or expanding market share is very important for any enterprise, and it is one of the most important goals of an enterprise's pricing.

(End of this chapter)