Before we plunge into the benefits of a market system, I would like to ask that you do already know what is the meaning of a market system? Well, there is nothing to worry about if you are hearing the term for the first time. Let us first discuss what it implies and you fan then read ahead to know the benefits of a market system. A market system is actually a very comprehensive term. This is so because it means a total environment where there is a dense network of the buyers, the sellers as well as the other elements which are at play when we ever talk about the entire buying and selling process. The trade sequence is what actually makes up the market system.
- The price is set according to the buyers and the sellers: The vert benefit of a market system is that you. Are able to set the prices according to the buyers and the sellers and there is no other third party influence involved in the scene. To make this clearer, keep reading ahead. From the viewpoint of the needs of the customer, increased demand will lead to a higher price while the prices are bound to drop is there is no demand form the end of the customers. On the other hand, if the producers are able to produce enough, then the prices drop down automatically. But, if the demand is not met, only then the prices go up. This way, there is a balance and clarity in work.
- Consumers are presented with a wider range of options: The second benefit of market system is that the customers are presented with a wider range of options. What has been noticed a lot of times is that the consumers are left with very little choice because their demands are not really kept in mind during the process of production. However, when there is a market system that is followed well, all the production is consumer centric and this is why the buyers have more options to choose from. However, this leads to stiff competition. The next point explains how that is great too.
- There is stiff competition which actually improves the service: Thirdly, it is obvious that there is going to be stiff competition. But, that is actually a good thing for the consumers. The reason behind this is that when there is competition amongst the producers, they are bound to provide you better results. This is why it is often said that the competition as a result of market system is always healthy. It provides options to the buyers and scope for development and improvement to the producers.
- The government is not burdened: Last but definitely not the least, the the government is not burdened to make any policy or rule. As stated and explained earlier, the market system is primarily dependent on the buyer and the seller. This is why the government actually turns out to be a third party and has no major rule making post in the process. The government also gets a chance to focus on other matters of concern and only those who are directly linked to the trading process make the decisions that are vital.