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market forces

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Market Forces


In economics, the forces of demand (a want backed by the ability to pay) and supply (the willingness and ability to supply).

Some economists argue that resources are allocated most efficiently when producers are able to respond to consumer demand without intervention from ‘distortions’ such as governments and trade unions, and that profits and competition between firms and individuals provide sufficient incentives to produce efficiently (monetarism). Critics of this view suggest that market forces alone may not be efficient because they fail to consider social costs and benefits, and may also fail to provide for the needs of the less well off, since private firms aiming to make a profit respond to the ability to pay.

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