Introduction Economic content of market equilibrium. Equilibrium price

Planning:

Introduction

1. Economic content of market equilibrium. Equilibrium price
2. Factors influencing the change of market balance
3. The role of the market mechanism in ensuring market balance
4. Models of ensuring market balance according to supply and demand
Summary
List of used literature
Introduction
If we want to build a stable economy in our country, if we want to live as rich and prosperous as the developed countries of the world, then we must move to a real market economy, no matter how difficult and complicated it may be.
The President of the Republic of Uzbekistan, Shavkat Mirziyoyev, in his speech at the extended meeting of the Cabinet of Ministers, dedicated to the main results of the socio-economic development of our country in 2016 and the most important priorities of the economic program for 2017 analyzing the progress, we have every reason to say that last year decisive steps were taken to implement important reforms.
The main goal of these reforms is to ensure a decent level and quality of life for the population. This policy aimed at rapid and stable development will be continued without a word.
Critical analysis, strict discipline and personal responsibility should be the daily rule of every leader, whether it is the prime minister or his deputies, a member of the government or a regional governor. Now each of us, first of all, the task of the heads of state administration bodies is to ensure the responsible performance of the tasks assigned to us based on the critical assessment of the population in the field and sector for which we are responsible. It is known that the effectiveness of the modernization and diversification measures in our country is bearing fruit. To date, the volume of gross domestic product in the Republic of Uzbekistan is increasing significantly, in turn, the revenue part of the state budget is also increasing. Such economic changes are the basis for achieving macroeconomic stability in the country, strengthening the monetary and payment regulations. A real market economy means that the state should not interfere in order to have a balance in the market, it should be formed freely. For this reason, several works are being carried out in our country. Efforts are being made to reduce the role of the state in the market economy as much as possible. The stability of economic growth is due to the mutual balance between gross supply and gross demand by economic sectors, supporting investments at a high rate of 28.6% and real income of the population by 10%. rode The price regulation of 37 types of products and services by the state has a negative impact on free competition. With this in mind, we should now focus not on setting prices, but on lowering prices and increasing quality by ensuring healthy competition between enterprises. Studying the international experience, it is necessary to open the way for the private sector to the monopolistic areas where competition can be introduced and thereby create a competitive environment. In this regard, it is necessary to update the laws on natural monopoly and competition and develop a strategy for creating a competitive environment in the economy. We can see that there are also relevant decisions to ensure free competition. "Creation of necessary conditions for the effective organization of privatization processes of state-owned enterprises, in particular, the development and implementation of the main measures for structural reforms related to the formation of a free and competitive market of services and products produced by them tasks related to "providing". One of the main rules of the market economy is the formation of free prices without the direct intervention of government officials. In market conditions, prices should be formed based on the laws of supply and demand. As an exception, the prices of products of monopolistic enterprises and some essential products may be unpredictable (for example, some medicines, etc.).
Pricing in the market involves the participation of two parties: the demand side (consumers) and the supply side (sellers). In this situation, the point of intersection of demand and supply is considered to be the balanced market price.
This approach to price determination applies not only to meat products, but also to other products. A simple example: the price of non-storable products (tomatoes, berries, etc.). During the day, the prices of exactly one type of product at one seller can fluctuate significantly. Thus, prices in the morning and during the day may be higher than prices at the end of the day ("evening market"). In order to strictly control prices, "fixed" prices (for example, by local authorities), according to the conclusions of economists, will aggravate the situation in the market prices and create or increase the imbalance between them. Any country wants to be in the leading positions in the world. Being a leader in the world depends on many factors, and of course the market economy is the most important of these factors.
In this written coursework, the laws that apply in the economy in the conditions of market relations, the theoretical and practical foundations of the market mechanism, the market equilibrium and equilibrium prices arising from the need to satisfy the needs of people and the scarcity of resources in society, the factors affecting the market equilibrium, the maximum and minimum prices are correct. Economic considerations have been made
1. Economic content of market equilibrium. Equilibrium price.
Equilibrium is such a state of a system that, if no external force affects it, it will maintain its state.
The situation in which the ratio between the amount of demand and the amount of supply is equal to each other is called market equilibrium. The price formed when the market is in equilibrium is called the market price.
The analysis of the concepts of demand and supply made it possible to determine whether the interests of sellers and buyers are compatible, and the compatibility between them is expressed in a balanced price.
In turn, there are also types of balance:
1. Momentary equilibrium, usually for a very short period of time, occurs mainly due to price increases.
2. Short-term balance. Such a high price encourages the introduction of additional products to the market. As a result, more products are brought to the market than before. As a result, the price will decrease.
3. Long-term balance. In this case, depending on the price in the market, the producers of goods adjust. New companies and enterprises are created. The offer will increase. The price will be lower than the short-run equilibrium price.
When the price is high, the demand decreases, that is, the supply is more than the demand, it is a natural situation for the market. Demand fluctuates depending on changes in the supply price and purchasing power. This movement continues until supply and demand are equal. When equalization occurs, supply and demand match each other in terms of quantity and content. Usually, the balance between supply and demand for a commodity is called partial balance. However, the world of goods is extremely rich, and the goods market consists of interconnected parts. It is called market equilibrium when the supply and demand for these various goods and services are consistent with each other in terms of quantity and content. Without such balances, the market will be out of balance. If supply and demand are separated for a long time, the market loses its normal state and image.
In the market economy, demand and supply are connected to each other through prices. They are very variable, and there are many factors that influence this. Market economy requires matching of supply and demand. Such compatibility arises from the demand of market economy development. Because economic growth will not happen without it. The real price in the market is caused by the interaction of supply and demand. The price when supply and demand match is called equilibrium price.

Picture 1. Equilibrium price.

The equilibrium price Pe (Fig. 1) is called such a price that if the quantity of good offered in the market equals Qs the amount of demand for it is equal to the amount of demand for it Qd, i.e. Qs  Qd.
The matching of supply and demand is the most important requirement of the market economy. Only when supply and demand match each other, trade is stable. This situation, when the amount of supply and demand is in harmony with each other in terms of their composition, is the market equilibrium. Based on this, economic growth occurs, production develops, and the economy grows more and more. The behavior of sellers and buyers to balance supply and demand involves four different changes:
a) an increase in the quantity and price of a balanced commodity means an increase in demand;
b) a decrease in the quantity and price of the balanced commodity indicates a decrease in demand;
c) an increase in the quantity of the balanced commodity and a decrease in its price means an increase in supply;
d) a decrease in the equilibrium quantity of goods and an increase in price means a decrease in supply.
Consistency is achieved through balance assessment. The generalization of the movement of market participants, making them understandable to each other, bringing them to the level where they can agree with each other is realized due to the emergence of a balance of demand and supply. In this case, the balance sheet plays the role of a messenger and an indicator. It is a natural phenomenon that along with different demand and supply, changes in prices, purchasing power, and non-stop changes due to competition. However, due to the conflict in the market, the relationship between the demand and the supply in terms of the price is equal, the adjustment occurs, and the market balance is ensured. An unbalanced market will be in an abnormal state. Therefore, the market equilibrium consists of the adjustment of supply and demand in terms of quantity and content, and the movement for equilibrium is permanent. If this balance is disturbed for a long time, the market loses its character, weakens, thereby worsening the general economic situation.
Supply and demand in many cases do not correspond to each other in experience. In these situations, the influence of market forces increases, as a result of which they change the prices of goods and services offered. This, in turn, causes a change in the volume of supply and demand. If the volume of demand is higher than the volume of supply, sellers try to take advantage of the situation and raise the price of goods. As a result, the demand gradually decreases. Thus, if the market price is not equal to the equilibrium price, sellers and buyers will direct the price in certain conditions towards the equilibrium price. The buyer buys the volume of goods or services according to his requirements, in the conditions where the market price corresponds to the equilibrium price. Sellers pay for the goods or services they have specified in this situation.
Problems of matching the laws of supply and demand. Under the conditions of free competition, demand and supply match on the basis of the law of value, and the market price (equilibrium price) is realized. As a result of the formation of market monopolies and the intervention of the state in the economy, market monopolies or the determination of prices by the state occur. The set price can be lower or higher than the equilibrium price.
The interaction of the law of demand and supply and the emergence of the equilibrium price leads to a number of conclusions.
1. In the market economy, there is a mechanism for coordinating the interests of sellers and buyers, which is reflected in the market price. Based on this, manufacturers can increase or decrease the volume of production of goods freely and according to demand in their production activities.
2. The price changes based on the law of supply and demand.
3. There is competition, without which the mechanism of supply and demand in the market does not work.
4. If supply and demand do not match, producers and buyers will move to adapt to new conditions. As a result, a new equilibrium price and market equilibrium will be formed, and a new volume of production will be created according to certain conditions.
The analysis of the concepts of demand and supply allows us to proceed to the exit, depending on the interests of sellers and buyers. Compatibility is reflected in a balanced price. By placing the demand and supply curves on one graph, we create the market equilibrium point (Fig. 1): Tb=Tf=N=M where: Tb is demand, Tf is supply, Nm is the equilibrium price, Mm is the equilibrium quantity of the commodity.

Picture 2. Market equilibrium

In the graph, the equilibrium price (Nm) and the equilibrium quantity of the product (Mm) correspond to point E. that is, when the price is 250 soums, buyers are ready to buy 3 tons of this product (flour), and sellers are ready to release 3 tons of flour to the market. At a price of 200 soums, the situation of sellers and buyers will change completely: sellers will be ready to sell only 2 tons of flour, and buyers will be ready to buy 5 tons, etc. In the graph, the market situation at the price level of 350 soums shows the overproduction of goods and represents a saturated market. On the contrary, in the market situation at the level of 150 soums, a shortage of goods (deficit) occurs and characterizes the market of scarce goods.
The concept of price elasticity is used to determine the level of sensitivity of the consumer to changes in commodity prices. Small changes in the price of some products can lead to large changes in the amount of products purchased. The demand for such products is called relatively elastic. A significant change in the price of other products can cause only small changes in the purchase amount.
2. Factors influencing the change of market balance.
In the definition of market equilibrium, we also considered that the existence of equilibrium in the market directly depends on supply and demand. Therefore, it is permissible to dwell separately on supply and demand.
The need of people is a scientific and vital concept, which is applied at all stages of economic development, because this concept means the need of people for life means. The appearance and implementation of the need in the conditions of the market economy is a requirement. But demand differs from need and is valid as an independent economic category (scientific concept). Its difference lies in the fact that people's needs keep growing and are endless. It becomes a demand if it is provided with money and has a purchasing power.
So, it can be said that demand is a need provided with money. If the need is not provided with the money necessary for its purchase, it remains a "want", a "desire".
Demand is the ability of consumers to purchase certain types and certain quantities of goods and services at the level of changing market prices.
Requirements vary. There are two different types of demand for the same good and service. Therefore, there will be individual demand and market demand.
The demand for material and immaterial benefits of each consumer, that is, an individual, family, enterprise, firm, is called individual demand. The sum of the demands of several consumers for goods and services is called market demand.
Let's give an example. If the price of one kg of potatoes is 600 soums, the demand will be 5 kg (for one month). If it is 500 soums, it will be 7 kg, if it is 300 soums, the demand will be 10 kg. The market demand can be 1 ton, 2 ton, 4 ton, etc.
The inverse or opposite relationship between the price of a product and the change in the quantity purchased is called the law of demand.
Figure 3. Demand curve.
The quantity and volume of demand does not only depend on the price, but also affects a number of factors:
1. The taste of consumers, that is, their tendency to buy or not to buy goods and services.
2. Number of market consumers.
3. Income of consumers
4. Price of related goods
5. The possibility of price and income changes in the future.
We will try to show how the change of these factors affects the change in demand:
1. If there is a positive change in the consumer's taste for a product, the demand for it will increase at the corresponding price level and vice versa.
2. If the number of consumers in the market increases, the demand increases, if the number of consumers decreases, the demand decreases.
For example, the improvement of the means of communication will reduce the scope of the international financial market, the number of participants in the processes of buying and selling of securities, and will lead to an increase in the demand for financial assets such as stocks and bonds. A decrease in the birth rate reduces the demand for kindergartens and schools.
3. The effect of changes in money income on the volume of demand is more complicated than other factors. When income is high, consumers buy high-quality goods and vice versa. For example, meat, honey and dairy products are bought instead of bread and potatoes.
Goods whose demand changes in a direct relationship with changes in income are called high-class goods. Goods whose demand changes inversely with changes in income are called low-class goods.
The relationship between consumer income and the amount of goods purchased by them was thoroughly studied by the German economist and statistician Ernst Engel (1821-1896). Accordingly, the relationship between the consumer's income and the amount of goods he can buy is called Engel's law. In fact, as the population's income increases, more goods are purchased, and when income decreases (decreases), purchases also decrease.
For low-quality goods, the Engel curve is downward-sloping, and as incomes increase, consumers buy less of them. If the consumption of a good does not depend on the level of income, then the Engel curve will be vertical.
Figure 3. Demand curve.
The quantity and volume of demand does not only depend on the price, but also affects a number of factors:
1. The taste of consumers, that is, their tendency to buy or not to buy goods and services.
2. Number of market consumers.
3. Income of consumers
4. Price of related goods
5. The possibility of price and income changes in the future.
We will try to show how the change of these factors affects the change in demand:
1. If there is a positive change in the consumer's taste for a product, the demand for it will increase at the corresponding price level and vice versa.
2. If the number of consumers in the market increases, the demand increases, if the number of consumers decreases, the demand decreases.
For example, the improvement of the means of communication will reduce the scope of the international financial market, the number of participants in the processes of buying and selling of securities, and will lead to an increase in the demand for financial assets such as stocks and bonds. A decrease in the birth rate reduces the demand for kindergartens and schools.
3. The effect of changes in money income on the volume of demand is more complicated than other factors. When income is high, consumers buy high-quality goods and vice versa. For example, meat, honey and dairy products are bought instead of bread and potatoes.
Goods whose demand changes in a direct relationship with changes in income are called high-class goods. Goods whose demand changes inversely with changes in income are called low-class goods.
The relationship between consumer income and the amount of goods purchased by them was thoroughly studied by the German economist and statistician Ernst Engel (1821-1896). Accordingly, the relationship between the consumer's income and the amount of goods he can buy is called Engel's law. In fact, as the population's income increases, more goods are purchased, and when income decreases (decreases), purchases also decrease.
For low-quality goods, the Engel curve is downward-sloping, and as incomes increase, consumers buy less of them. If the consumption of a good does not depend on the level of income, then the Engel curve will be vertical.
Figure 3. Demand curve.
The quantity and volume of demand does not only depend on the price, but also affects a number of factors:
1. The taste of consumers, that is, their tendency to buy or not to buy goods and services.
2. Number of market consumers.
3. Income of consumers
4. Price of related goods
5. The possibility of price and income changes in the future.
We will try to show how the change of these factors affects the change in demand:
1. If there is a positive change in the consumer's taste for a product, the demand for it will increase at the corresponding price level and vice versa.
2. If the number of consumers in the market increases, the demand increases, if the number of consumers decreases, the demand decreases.
For example, the improvement of the means of communication will reduce the scope of the international financial market, the number of participants in the processes of buying and selling of securities, and will lead to an increase in the demand for financial assets such as stocks and bonds. A decrease in the birth rate reduces the demand for kindergartens and schools.
3. The effect of changes in money income on the volume of demand is more complicated than other factors. When income is high, consumers buy high-quality goods and vice versa. For example, meat, honey and dairy products are bought instead of bread and potatoes.
Goods whose demand changes in a direct relationship with changes in income are called high-class goods. Goods whose demand changes inversely with changes in income are called low-class goods.
The relationship between consumer income and the amount of goods purchased by them was thoroughly studied by the German economist and statistician Ernst Engel (1821-1896). Accordingly, the relationship between the consumer's income and the amount of goods he can buy is called Engel's law. In fact, as the population's income increases, more goods are purchased, and when income decreases (decreases), purchases also decrease.
For low-quality goods, the Engel curve is downward-sloping, and as incomes increase, consumers buy less of them. If the consumption of a good does not depend on the level of income, then the Engel curve will be vertical.
Figure 3. Demand curve.
The quantity and volume of demand does not only depend on the price, but also affects a number of factors:
1. The taste of consumers, that is, their tendency to buy or not to buy goods and services.
2. Number of market consumers.
3. Income of consumers
4. Price of related goods
5. The possibility of price and income changes in the future.
We will try to show how the change of these factors affects the change in demand:
1. If there is a positive change in the consumer's taste for a product, the demand for it will increase at the corresponding price level and vice versa.
2. If the number of consumers in the market increases, the demand increases, if the number of consumers decreases, the demand decreases.
For example, the improvement of the means of communication will reduce the scope of the international financial market, the number of participants in the processes of buying and selling of securities, and will lead to an increase in the demand for financial assets such as stocks and bonds. A decrease in the birth rate reduces the demand for kindergartens and schools.
3. The effect of changes in money income on the volume of demand is more complicated than other factors. When income is high, consumers buy high-quality goods and vice versa. For example, meat, honey and dairy products are bought instead of bread and potatoes.
Goods whose demand changes in a direct relationship with changes in income are called high-class goods. Goods whose demand changes inversely with changes in income are called low-class goods.
The relationship between consumer income and the amount of goods purchased by them was thoroughly studied by the German economist and statistician Ernst Engel (1821-1896). Accordingly, the relationship between the consumer's income and the amount of goods he can buy is called Engel's law. In fact, as the population's income increases, more goods are purchased, and when income decreases (decreases), purchases also decrease.
For low-quality goods, the Engel curve is downward-sloping, and as incomes increase, consumers buy less of them. If the consumption of a good does not depend on the level of income, then the Engel curve will be vertical.
Figure 3. Demand curve.
The quantity and volume of demand does not only depend on the price, but also affects a number of factors:
1. The taste of consumers, that is, their tendency to buy or not to buy goods and services.
2. Number of market consumers.
3. Income of consumers
4. Price of related goods
5. The possibility of price and income changes in the future.
We will try to show how the change of these factors affects the change in demand:
1. If there is a positive change in the consumer's taste for a product, the demand for it will increase at the corresponding price level and vice versa.
2. If the number of consumers in the market increases, the demand increases, if the number of consumers decreases, the demand decreases.
For example, the improvement of the means of communication will reduce the scope of the international financial market, the number of participants in the processes of buying and selling of securities, and will lead to an increase in the demand for financial assets such as stocks and bonds. A decrease in the birth rate reduces the demand for kindergartens and schools.
3. The effect of changes in money income on the volume of demand is more complicated than other factors. When income is high, consumers buy high-quality goods and vice versa. For example, meat, honey and dairy products are bought instead of bread and potatoes.
Goods whose demand changes in a direct relationship with changes in income are called high-class goods. Goods whose demand changes inversely with changes in income are called low-class goods.
The relationship between consumer income and the amount of goods purchased by them was thoroughly studied by the German economist and statistician Ernst Engel (1821-1896). Accordingly, the relationship between the consumer's income and the amount of goods he can buy is called Engel's law. In fact, as the population's income increases, more goods are purchased, and when income decreases (decreases), purchases also decrease.
For low-quality goods, the Engel curve is downward-sloping, and as incomes increase, consumers buy less of them. If the consumption of a good does not depend on the level of income, then the Engel curve will be vertical.

Summary.
To sum up, the market system is characteristic of the economy of all countries, and it is constantly expanding its scope. Effective organization of economic relations and rational allocation of resources have long attracted the attention of mankind, especially economists. Because without proper organization of economic relations and market system, it will be difficult for the state to become one of the most developed countries.

It is known that the production possibilities, labor resources, natural resources, land, that is, these resources at the disposal of the society are limited, and their use and placement requires a rational approach. We know that the rational use of resources is one of the main problems of the economy. Currently, the dominance of the market economy makes it possible to allocate resources efficiently and accelerate economic growth, improve the quality of products and ensure a high standard of living. Such a system accelerates the wide use of favorable methods of labor stimulation and the growth of personal wealth and national wealth.
During the course work, we realized that the market is mainly shaped and regulated by demand and supply, competition, prices, etc. It can be noted that the movement of the law of supply and demand and the development of the market economy create great opportunities to increase the efficiency of the use of all the resources that are very important for humanity and society and focus on the benefit of people. It is very important to make full use of resources, to increase the efficiency of natural resources, to create new raw materials and materials thanks to new technologies. The current technology has raised the production to a high level, mainly with low cost, especially with low material consumption, and all this is the result of market demand. Therefore, if the market is freely formed on the basis of demand, supply and especially competition, there will be growth and development
The development of production based on demand in all aspects and on a large scale ensures a high level of human lifestyle. Under the influence of the law of supply and demand, the developing economy allows the most effective use of available opportunities for the benefit of people. The superiority of the market economy should be determined by this. The market is not always balanced, but it is always tried to be balanced. And if this action is carried out on the basis of competition, demand, supply, price, we can say that a real balance can be achieved and there will be development in the country along with the market.

List of used literature:

1. President Shavkat Mirziyoyev's speech at the ceremony dedicated to the 26th anniversary of the adoption of the Constitution of the Republic of Uzbekistan. 08.12.2018
2. Report of the President of the Republic of Uzbekistan at the extended meeting of the Cabinet of Ministers on the main results of socio-economic development in 2016 and the most important priorities of the economic program for 2017
3. The main trends of the socio-economic development of the Republic of Uzbekistan in 2019
4. Address of the President of the Republic of Uzbekistan Shavkat Mirziyoyev to the Oliy Majlis. 28.01.2020
5. Decision of the President of the Republic of Uzbekistan No. PQ-4653. 26.03.2020
6. Karimov I.A. Uzbekistan is striving for the 21st century. / Report of the First Convocation of the Fourteenth Session of the Oliy Majlis of the Republic of Uzbekistan, April 14, 1999. - T.; Uzbekistan, 1999. pp. 15-16.
7. Pindike Robert. Microeconomics: An abridged translation from the English / Pindike Robert, Rubinfeld Daniel. - T.; 2002.
8. Economic theory: uchebnik / I.K. Stankovskaya, I.A. Strelets.- 5-e izd., pererab. i dop.–M.: Eksmo, 2010
9. Smith A. Issledovanie o prirode i prichinax richatka narodov. Moscow, 1962. Str. 332
10. Sh.Shodmonov, R.Alimov, T.Joraev "Economic theory" T.: 2002.
11. D. Tojiboyeva "Economic theory" T: 2003. "Uzbekistan".
12. Fundamentals of macro-microeconomics. Study guide. O. Abdullayev, J. Isakov, D. Abdullayev, O. Orinboyev.

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