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services. For example, Chandani Chowk, Delhi Stock Exchange. Market is cleared in the sense that there is no unsold stock and no unsupplied demand. A market is a mechanism by which buyers and sellers interact to determine the price and quantity of goods and services. Samulson & Nordhaus Market may be as small as a fish market in a corner of a city or as large as the entire world. Example, the global market for arms, cars etc.
Free Market :- A free market is one in which market forces of demand and
supply are free to take their own course and there is no outside control on price, demand & supply.
There are only two variables involved , pizza price & pizza demand. We have calculated that demand for pizza depends on its price. The same statement can be written as Demand for Pizza is the fuction of its Price. In mathematical terms, this statement is written in its functional form as : Dp = F(Pp) Where, Dp = demand for pizza & Pp= pizza price/unit Suppose, there are two variables X & Y and these variables are so related that the values of Y depends systematically on the value of X. i.e- variable Y & X are related in cause-and-effect manner. This relationship between variables X & Y can then be expressed in the form of an equation. Y = F(X) Is read as Y is the function X. It means that the value of Y depends on the value of X and that for each value of X, that is a unique value of Y. The variables, X & Y may represent any two economic variables. # Relationship of different economic variables consumption a function of income.
Supply :- Supply of any commodity means the quantity offered for sale by
any firm (or by an industry) at a particular price of that commodity.
Goods :- Any thing that satisfies human wants is known as goods. Different
types of Goods are:
1. Free Goods:- Goods which are available in abundance and hence
payment.
3. Consumption Goods:- Those goods that directly satisfy human wants
etc.
Utility :- It is the ability to satisfy human wants. Production :- Production is a creation of utility & consumption is using up
that utility.