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7. Market

Lead-in:

  1. demand for goods – попит на товар

  2. domestic market – внутрішній ринок

  3. stock market – фондова біржа

  4. market share – частка на ринку

  5. consumption – споживання

  6. meet the demand – задовольняти попит

An area where there is a demand for certain goods is called a market. A company which sells goods locally caters for the local market. Goods sold in the same country as they are produced are sold on the home (or domestic) market. A company which sells goods abroad is an exporter. An exporter sells goods on the international (or overseas) market. An importer buys goods abroad and imports them into his own country.

There are a lot of markets: stock market, money market, labour market, etc.

Some markets, shops and stalls physically bring together the buyer and the seller. Other markets, Stock Exchanges for example, operate chiefly through intermediaries (stockbrokers) who transact business on behalf of clients. Both of them determine prices that ensure that quantity people wish to buy equals the quantity people wish to sell. Price and quantity cannot be considered separately. All trade depends on supply (having goods or services to sell) and demand (consumers, people who whant to buy). If you increase production but demand remains stable, the price will fall. Therefore many large suppliers do not produce to their maximum capacity. They put a ceiling on their output to keep the price high. A group of companies or countries producing the same sort of goods are called a cartel and when they completely control the market in those goods they are said to have a monopoly. In the USA there are antitrust laws against this sort of practice which kills competition. The percentage of the total of one kind of goods sold by one company or country is called its market share. However, suppliers usually keep stocks of theirs product so that if consumption suddenly increases, they can meet the demand. Certain goods always keep a percentage difference between their prices so if the price of one rises or falls, the others do the same. This is called maintaning the differentials. When several products are linked in this way, the price of one of them is usually taken as the reference price for all the others. If goods cannot be sold in the market, they will cease to be produced.

The market reflects any change in the economy. It is sensitive to interest rates, inflation, employment and political events in any country.

Questions for comprehension check-up and discussion:

  1. What do we call an area where there is a demand for certain goods?

  2. What is the home (or domestic) market?

  3. Where does an importer (exporter) buy and sell goods?

  4. Does all trade depend on supply and demand?

  5. What is a monopoly?

  6. Does the market reflect any change in the economy?

  7. What are the factors the market is sensitive to?