Market forces

Definition

Market forces refer to the economic factors such as supply and demand, competition, and pricing that influence the behavior of buyers and sellers in a market economy. These forces determine the prices of goods and services, production levels, and resource allocation.

Related terms

Supply and Demand: This term refers to the relationship between the quantity of a product that producers are willing to sell at different price levels, and the quantity that consumers are willing to buy at those price levels.

Competition: Competition occurs when multiple sellers offer similar products or services in order to attract customers. It leads to better quality products, lower prices, and innovation.

Pricing: Pricing involves setting a monetary value for goods or services based on factors such as production costs, competition, consumer demand, and profit goals.