It is the exchange of goods and services according to the law of supply and demand. The predominant feature of market exchange is that goods and services are bought and sold at a money price which is determined by the impersonal forces of supply and demand. Unlike reciprocity and redistribution, in which the social and political roles of those who exchange are important, a market exchange is impersonal and occurs no matter what the social position of the participants is. Market exchange is thus the most purely economic model of exchange. In this form of exchange social or political goals are less important than economic goals. Therefore, market exchange is also known as money exchange or commercial exchange. These exchange systems involving money emerge when an economy develops to the point where supplies of food regularly exceed the needs of those engaged in food production. Market exchange depends on how much people desire particular goods or services, and how much they must give to obtain them. Every time we speak of selling something or buying something we need, we are using terms associated with market exchange such as buy, sell, discount, price, money, cost, profit, loss etc. These words express various aspects of the many different transactions that characterise our complex market economy.
From ESO-11 The Study of Society (Unit – 14) of IGNOU
Market Exchange
It is the exchange of goods and services according to the law of supply and demand. The predominant feature of market exchange is that goods and services are bought and sold at a money price which is determined by the impersonal forces of supply and demand. Unlike reciprocity and redistribution, in which the social and political roles of those who exchange are important, a market exchange is impersonal and occurs no matter what the social position of the participants is. Market exchange is thus the most purely economic model of exchange. In this form of exchange social or political goals are less important than economic goals. Therefore, market exchange is also known as money exchange or commercial exchange. These exchange systems involving money emerge when an economy develops to the point where supplies of food regularly exceed the needs of those engaged in food production. Market exchange depends on how much people desire particular goods or services, and how much they must give to obtain them. Every time we speak of selling something or buying something we need, we are using terms associated with market exchange such as buy, sell, discount, price, money, cost, profit, loss etc. These words express various aspects of the many different transactions that characterise our complex market economy.
From ESO-11 The Study of Society (Unit – 14) of IGNOU