market mechanism is a set of interrelated practices and economic leverage in the production, exchange, distribution and consumption in the laws of the market and commodity-money relations.
famous American economists Samuelson and Nordhaus define market mechanism of regulation of the economy as a form of economic organization, where individual consumers and producers through the market cooperate to solve common economic problems.
Balcerowicz Polish economist sees the market mechanism as a way to hold the balance needed between supply and demand in the horizontal direction.According to him, the market system can be called only those economic system in which the market mechanism is the main way of distribution and coordination of goods.
market freely functioning in reality, it carries items free.There are natural and unnatural monopoly-type education, which tend to retain high prices and thus hinder the free movement of resources, resulting in limited access to markets.
distortion of market processes can occur under the influence of inflation, the wrong policy of the state in economy, business failures, lack of commercial awareness and other reasons.
Development distortion in this direction may continue until the start of operation of the market mechanism.In this case, it acts limit.Under his influence, in spite of all distortions and deformations, prices will vary due to the impact on them of supply and demand, and investment flows, the flow of resources will continue to focus on fluctuations in demand.Remain untouched and other parts of the market mechanism that maintains the viability of the market.
market mechanism (market economy) functions thanks to this system the important constituent elements that make up the whole mechanism of the market.These essential elements include, first of all, manufacturers and consumers.The interaction between them is set as the exchange of results of operations.Manufacturers are the providers of a new product, consumers - its customers.Consumption is a logical extension of the production process, in which the goods are processed by users.
next element - is the economic isolation due to private ownership or mixed.The third element - the price.This is the most important element, because it is the price reflect the essence of the mutual development of supply and demand on the market.The fourth element - supply and demand.They, like prices, are the main elements of the market, providing a link between consumers and producers of goods.The fifth element - the competition.It maximizes profits and contributes to the expansion of production.
competitive market mechanism is a way of interaction of the subjects of market relations and free mechanism for regulation of its proportions.Economist Adam Smith called the competition "invisible hand" of the market.The main function of the competition is to determine the magnitude of economic regulators, such as price, interest rate, rate of return and others.
Competition - is the freedom to participate in economic units of any economic sector.This freedom is essential for the economy to adapt to changes in technology, the supply of resources and consumer tastes.The main advantage of the market is that the efficiency of its production is constantly stimulated.The object of the competition acts as the price and cost of production, design and quality.Competition is characterized by the ability of scientific and technical progress, to respond to changes in demand, equalization of the rate of profit and the level of wages in the sectors of the national economy.
