Market function.

The essence of market is revealed in the functions it fulfills. The most important ones are:

1. Self-regulation of production, which presupposes the sequence of production and consumption in the assortment structure as well as the maintenance of demand and supply equilibrium with respect to volume and price; The market answers on questions: what to make? For whom? How to make? The market is inconceivable without a competition (intrabranch and interbranch).

2. Stimulating function consisting in making the producers manufacture new production with the lowest costs per item and maximum profit.

3. Information. Through varying prices, rates the market gives participants of manufacture the information on socially necessary quantity, assortment and quality of the goods and services.

4. Intermediary. The market allows the seller and the buyer to find each other.

5. Definition of the price. The market recognizes only socially necessary expenses, only they will be paid by the buyer.

6. Sanifying. By means of a competition the market clears a social production of economically unstable, impractical facilities.

2. Law of supply and the supply curve. Non-price factors influencing to changes in supply. Factors affecting supply.
3. The concept of market equilibrium and equilibrium prices. The pricing mechanism in the market economy.