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Market Theory

  • Facilitate trade using money as a universal intermediary.

  • Money (capital) itself can be traded on financial markets.
  • Offer goods for sale on open market to highest bidder.

  • Purchase goods at best open market price.

  • Only care about:
    • Quality of goods
    • Price of goods
  • the supply/demand curve

    Supply/Demand

  • openly quoted prices

  • demand falls as price rises

  • supply rises as price rises

  • market settles at price where supply and demand match
up home © RBJ created 97/9/18 modified 97/9/20