What is the market, the function and role of the market in the allocation of resources?

I. The function and role of the market in the allocation of resources

The basic characteristic of a market economy is to use the market as a basic means to allocate resources.

(I) the meaning of the market:

First, the market is the place of exchange; the market is first of all a spatial concept, is the place where people exchange activities and economic ties with each other;

Second, the market is the exchange of relations; behind the exchange of things in the market, reflecting the mutual interests of people. The market is a comprehensive reflection of the interests of various economic agents.

Third, the market is a regulating mechanism; market exchange of economic interests involved in the changes will inevitably have a regulating effect on the economic behavior of various economic agents.

(2) the function of the market:

1, aggregation function: the market to a variety of commodities, a variety of resources, as well as demand for commodities and resources are concentrated to the market.

2. Diffusion function: on the basis of exchange, it diffuses various resources obtained by producers and demanders through exchange into their respective economic activities.

(3) the role of the market:

1, the allocation of resources: the role of the market resource allocation is through the market to arrange all kinds of resources in the social context. In the process of the market role, people in the economic interests of the drive, inevitably put their own resources into the field that can get the greatest benefit.

2... Regulate economic activities: the market has the role of regulating economic activities is through the market to affect people's production, distribution, exchange, consumption activities. First, to regulate production activities, what people produce, how much production are subject to market regulation; Second, to regulate distribution activities, people's income distribution and distribution of the amount of regulation by the market; Third, to regulate the exchange activities, people whether to exchange, to what extent participation in the exchange of regulation by the market; Fourth, to regulate the consumption activities, people's consumption and the amount of consumption by the market regulation. The quantity of consumption is regulated by the market.