Wondering Why?

Why Do Markets Exist?

Why Do Markets Exist?

Some people have money, some have land, some have intellectual property, and some own goods of various types. A person owning land may not have enough money in liquid form in order to meet his needs. To get money he needs to sell his land. Likewise anyone who owns any property in one form might have the need to get the property in another form. This need or want will make them to exchange the goods or money or skills which ever they possess for the entity they are in need of. To perform this act markets exist.

Markets follow the concept of bartering system. When you join a company you are using your skills and talents for the sake of the company’s business and in turn get money in the form of salary. The money you earn can be used for trading goods or any other service. Using money for trading will make you to do business faster than using goods and labor. With enough money you can own anything that you need immediately. For example, it will be really difficult to offer the harvests of an agricultural land in exchange for a laptop from Dell while money will aid here in allowing you to buy the laptop.

Financial markets exist as they help to create an understanding between investors or capitalists and capital users in the companies and government. Here, the people who have excess money with them look for saving it, while the one who is in need of money would like the investor to invest some money for his needs. Markets exist to provide mutual benefit to its customers. Markets can run the business to satisfy all types of its customers.

As there are several users, those who invest and those who are in need with various preferences will generate the necessity of the market. Stock market and bond markets also came into existence later.


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