The financial encyclopedia uses cookies to improve your user experience. Find out more here!



 

 


 

Market forces
 

 

The underlying forces in an economy, which affect the levels of prices through exerting pressures on the demand for or the supply of various goods and services. In a completely free market these forces will be regulated ultimately by fluctuations in public taste and the availability of both raw materials and finished goods. Free market conditions are nowadays infrequent and levels of supply and demand are very much at the mercy of government policy: e.g. supply can be manipulated by quotas and tariffs on imported goods, while demand is at the mercy of indirect taxation; both can also be much affected by vacillating rates of exchange.

Reference: The Penguin Business Dictionary, 3rd edt.