Market Economy

Market Economy is a type of market where individuals and private firms make the main decision about the market supply and demands. It does not mean that the government has no significant influence on market economy type of market, it is basically based on the fact that individuals and private firms makes the majority decisions. The production firms provide the market with good within a reasonable price range and the individuals who make the purchases determines how they want to spend their money on the market there for both sided of the production firms and the individual purchaser have the ability to influence the market with their decisions. Therefore the price, highest profit, least costly yield of the market is produced by the private firms. Labor and property ownership are regulated by the individuals.

Scarcity

Scarcity is bad for the market; most market’s economy is suffering from scarcity in various ways that keep the stock market un safe to invest in. Scarcity is a situation where goods or product needed are not available as needed. There are many types of scarcity some are; food scarcity, money, clothes, crude Oil, water and so on. Sometimes scarcity of goods may be life treating, for example a country suffering from electricity or food scarcity, this are life based survival product, some people need electricity to stay on life support while some need food to stay healthy. We can see scarcity from different point of views, as long as it is needed and it is not available, it is considered scarce or it is only available in small quantity is also considered scarce. A situation like this may affect the market in terms of product prices, it usually leads increase in prices of a product and it as a result affect the consumer’s spending that also affect the stock market down the line.

Efficiency

Efficiency is the most effective way to use the society’s resources in satisfying the people’s want and needs. A well functioning government will make sure they keep up with their market’s want and needs, they will consider the rate of demands towards supplies, so that way they do not over supply the market as these may leads to price variation and this could be unhealthy for the population and may leads to government corruption.