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Markets, Theory of

In most societies, resources are allocated by the government, the market, or a mixture of both. A market can be defined as a place where an exchange of a particular good or service between buyers and sellers occurs. Market forces refer to the behavior of buyers and sellers in a market. Consensus on price is the key determinant of transactions. In theory, markets are not centrally organized and no single agent can influence market price. Thus, prices are determined by the market, but prices also have the largest influence on the behavior of individual producers and consumers in a market. Economists have traditionally focused on the way different markets function. Markets are relevant in education even in instances where there is significant government operation in ...

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