On a more general plane, the market is the mechanism by which the valuable resources of our society are allocated among the various alternative ends that compete for their use. From the point of view of society, the basic criterion of a good market is efficiency. If the market is inefficient and does not help to maximize consumer satisfactions, then society cannot be content with it. We will never have markets that operate at optimum efficiency in the economic sense, because society also places upon markets demands of a noneconomic character.
While society seems to desire highly competitive markets, it is also strongly concerned with the welfare and security of individuals. Society wants only efficient middlemen to serve it, but still it desires freedom of entrance for participation in the market as a characteristic of American enterprise. Demands for efficiency or cost reduction are made upon manufacturers and middlemen. At the same time, society insists upon extensive varieties of goods, broad assortments of particular kinds of merchandise, and numerous services, all of which are expensive to provide.
Attributes of Desirable Markets: In spite of conflict between economic and noneconomic goals, it is possible to indicate some attributes which make a market socially
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This is a price which in the long run covers the cost of making the goods and providing for their effective distribution. 4. Adequate and reliable market information is provided to market participants, both producers (including marketing agencies) and consumers. 5. Institutions performing marketing functions are dynamic, modifying their character or offerings in response to changes in customer needs. 6. The market is regulated by law to some extent to prevent abuse and for the ultimate welfare of society (HANSEN, 1961).
Various Conceptions: The foregoing criteria are useful in judging markets in various specific senses in which the term is popularly used. The term sometimes is employed with a geographical connotation. Thus it may relate to a highly localized area, as in the case of a municipal retail market, or it may embrace a region, a country, or even the whole world. “There is a world market for grain” and “Los Angeles is a fastgrowing market” are expressions illustrating the point.
Furthermore, the term market may relate to a place maintained by an organization for the purpose of facilitating buying and selling for its membership, as illustrated by produce exchanges and boards of trade. It may refer to the sphere in which price-making forces of a single commodity operate, or it may embrace a large variety of products. Thus, one may speak of the cotton market being brisk or sluggish or the market for cigarettes being affected adversely by medical reports on cancer causes.