The word 'market" refers to a place to exchange goods or services; in the Jamaica real estate market the same principle is applied.
The producers (vendors) and consumers (purchasers) need an intermediary to stimulate a healthy degree of activity in a trade.
This is typical for homes in Negril Jamaica.
No matter what type of political system controls an economy, every economy in every country in the world (and no different for Jamaica property) has to deal with three basic questions: 1.
What will be produced? 2.
Who will do the producing? 3.
Who will get what is produced? What Will Be Produced? In a capitalistic society, the free market mechanism, or price system, provides answers to these three basic questions.
Under the price system, any producer can place a product or service in the marketplace where it competes with similar products offered by other producers.
Consumers evaluate the worth, quality and price of the competing products and services.
Consumer evaluation is very important in assessing the value for homes in Negril Jamaica and it is crucial that demand must meet supply in determining Jamaican property prices.
The products sold tell producers which products consumers prefer.
Those products that do not sell can no longer be produced at a profit and profits are necessary in order for a producer to remain in business.
So the answer to basic question is: The consumers actually decide what will be produced.
Those products not desired by consumers produce little or no profit and will have to be replaced by new products for consumers to evaluate.
The answer to question number 1 also contributes to finding the answer to question number 2: Who will do the producing? Who Will Do The Producing? As an example, imagine you are a producer of canned butter beans and you are competing in the market against four other producers of canned butter beans, all of similar quality and price.
A thorough analysis of your production methods and equipment reveals that a change in procedure will permit you to reduce your price slightly below that of competitors and retain the quantity and quality of the product.
Gradually thereafter, your product begins to be selected more and more frequently.
You decide to expand your factory and increase the amount of canned butter beans produced.
In time, other producers obviously either must become more efficient, as you have, or face being forced out of business due to a decrease in their sales and profits.
Thus the answer to question 2 is: the most efficient producer of a comparable-quality product will do the producing.
A key concept when looking at real estate in Jamaica is that better homes, in better locations will just yield better prices.
Homes in Negril Jamaica are a prime example of this concept and provide empirical evidence of the home type and location determine price.
In a totalitarian or socialist society, the state performs the role of intermediary in a much more authoritarian manner than in a democratic society.
Whereas in the free enterprise system (within the capitalist society) the individual consumer's desires and decisions are the primary determinants, in a controlled economy, the state or representatives of the state make those decisions.
Also, in the state or centrally-planned economy (within the socialist society) a committee or other state agency has to survey the national market to determine which goods and services are selling well and which ones should be removed from the marketplace.
In the free enterprise system the same results are accomplished automatically by millions of individual consumer choices exercised every minute of every day.
Those products that sell well will be replaced with more of the same.
Also, those producers that do not sell well will be removed and replaced by other producers.
Therefore there is 'automatic' working of the system.
Who Will Get What Is Produced? In the free enterprise system, anyone can decide to produce television sets, for example, if one has the means.
The producer who has accurately estimated the demand for television sets will make a profit.
Other producers of items not selling well may become aware of the profits realized by the television set producer and decide to switch production in their plants and factories to the more profitable television sets and thus become competitors for the buyer's dollar.
Consumers willing to spend part of their available supply of dollars will get the television set of their choice.
The answer to question number 3: those people who are willing to spend their dollars in the marketplace will get what is produced.
If more than one person wants the same item, the one willing to spend the most dollars usually gets the item.
We do not worry about whether there will be enough television sets or cars for us to be allowed the privilege of buying one, as is the concern in communist states.
We know that television sets and cars will be available.
Our problem is in selecting the best product within the limits of our income.
Finally, a market permits products and services to be bought and sold.
But goods and services have no value in and of themselves.
It is only when consumers want them that they have value.
Thus, the function of every market is to facilitate exchange between buyers and sellers.
Homes in Negril Jamaica are a true example of the concept of market equilibrium pricing.
So it is with Jamaica real estate, the marketplace determines the sales prices, not sellers and not Jamaica realtors.