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CandleFocus Glossary Editor
An open market is an economic system which allows for complete freedom for buyers and sellers to participate in the market. This means that there are virtually no barriers or regulations at a government level stopping certain types of activity from taking place. It is a system of free market regulations, with competitive entry and pricing. This essentially means that in open markets, the market forces of demand and supply determine the price of goods and services.
In contrast to open markets are closed markets, where participants must adhere to strict regulations and essentially need permission from the government to take part in the market. An example of a closed market is North Korea, where the government has strict control over both the production (what is being produced) and the prices (how things are priced).
Open markets are very attractive to potential investors as they provide an attractive business environment. Being free to compete in a market and choose their own pricing generally maximizes their chances of gaining market share. Companies in open markets tend to be more efficiently run than those in closed markets, because they are competing to create better, more cost-efficient services and products.
Furthermore, open markets allow for a greater degree of choice and variety for consumers. With no restrictions or tariffs stopping certain goods from entering the country, tastes and preferences from around the world are open to the consumers of open markets. This means that consumers in open markets have access to a much larger variety of products and services than those in closed markets.
Open markets are generally seen as beneficial for both business owners and consumers. In fact, the United States, Canada, Western Europe and Australia, who all have relatively open markets, are some of the wealthiest countries in the world. They have been able to reach tremendous levels of success by providing businesses with an environment that enables them to innovate and create efficient services and products while also providing diverse range of choices to consumers.
In contrast to open markets are closed markets, where participants must adhere to strict regulations and essentially need permission from the government to take part in the market. An example of a closed market is North Korea, where the government has strict control over both the production (what is being produced) and the prices (how things are priced).
Open markets are very attractive to potential investors as they provide an attractive business environment. Being free to compete in a market and choose their own pricing generally maximizes their chances of gaining market share. Companies in open markets tend to be more efficiently run than those in closed markets, because they are competing to create better, more cost-efficient services and products.
Furthermore, open markets allow for a greater degree of choice and variety for consumers. With no restrictions or tariffs stopping certain goods from entering the country, tastes and preferences from around the world are open to the consumers of open markets. This means that consumers in open markets have access to a much larger variety of products and services than those in closed markets.
Open markets are generally seen as beneficial for both business owners and consumers. In fact, the United States, Canada, Western Europe and Australia, who all have relatively open markets, are some of the wealthiest countries in the world. They have been able to reach tremendous levels of success by providing businesses with an environment that enables them to innovate and create efficient services and products while also providing diverse range of choices to consumers.