Revision 1
The course describes how the market mechanism for resource allocation to the production of goods and services works, and which political tools that can be used to adjust the market result. First, the factors that decides demand and supply on a market and how they interact through the price mechanism is studied. Further, the companies’ acting under different market structures and the price formation on the factor markets, particularly the labor market, is treated. The concept economic efficiency is defined and analyzed under different market forms. Finally, shortcomings that can occur in the market system’s ability to allocate resources, and various alternative interventions that the authorities can make and their effect on the market result, is discussed.