Market Forces

Definition

Market forces refer to the factors such as supply and demand that influence prices and quantities in a market economy. These forces determine the equilibrium price at which buyers' demands match sellers' supplies.

Related terms

Supply and Demand: The relationship between the quantity of a good or service that producers are willing to sell and the quantity that consumers are willing to buy at different prices.

Equilibrium Price: The price at which the quantity demanded equals the quantity supplied in a market.

Elasticity: A measure of how responsive demand or supply is to changes in price.