A market system is necessary to convey the decisions made by buyers and sellers of products and resources".
Independent economies and enterprise organizations form a private sector, and the state forms public sector. In spite of the fact that the market is self-regulated, the state takes measures on its regulation: establishes a marginal level of the prices for the certain goods and services, a minimum level of wages, limits a competition in the separate markets, etc.
Buyers forms demand for the goods and services. Hence, constantly increasing needs form the demand. In the economic theory there is a standard definition of demand. Demand is ability and desire to purchase goods and services. It is influenced with some factors (non-price factors): tastes and preferences of consumers, quantity of buyers in the market, the prices for the goods-substitutes, and a level of income of buyers, consumer expectations concerning the future prices, income and presence of goods.
The price of the goods and quantity of demand for these goods are inversely proportional quantities. Economists name this the law of demand. That is the higher the price of the product, the less the consumer will demand with other things being equal.
Manufacturers make the goods and services, which they consider it is possible to sale in the market. Set of commodity producers provides to people the satisfaction of their solvent demand, that is forms the supply. The supply is desire and ability of manufacturers to give the goods for sale in the market. Ability to give the goods is connected with use of the limited resources, which are not always enough to satisfy needs of all people. Thus, the supply is a quantity of the goods and services, which a seller wishes and able to sell. That is the law of supply states, the higher the price, the larger the quantity supplied, all other things constant.
Thus, in the market, on the one hand, there are