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Market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations.

Measure of value

In classical economics, market pricing is primarily determined by the interaction of supply and demand. Price is Interrelated with both of these measures of value. The relationship between price and supply is generally negative. Meaning that the higher the price climbs, the lower amount of the supply is demanded. Conversely, the lower the price, the greater the supply is demanded[1]. Market price is just one of a number of ways of establishing the monetary value of a good or a transaction. Shifts due to changing consumer preferences will inherently influence market price. [2]

Other measures of value include historical cost, the resource cost of the good or service[3], an appraised value (such as the discounted present value), economic value and intrinsic value.

See also

References

  1. ^ Supply & Demand on Price, http://www.oxfordfutures.com/futures-education/fundamental-analysis/supply-demand.htm, retrieved 17 January 2006  
  2. ^ Economics: Principles and Policy. South-Western College Pub; 11 edition. July 2008. ISBN 0-3245-8620-5.  
  3. ^ Historical Cost 23 September 2009







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