Legal Definitions - market price

Market Price

Market price refers to the current value at which a good, service, or asset can be bought or sold in a competitive marketplace. This price is typically determined by the forces of supply and demand, reflecting what willing buyers are prepared to pay and what willing sellers are prepared to accept at a given time. It represents the equilibrium point where the quantity of an item supplied matches the quantity demanded.

Examples:

• Imagine a popular model of used car, like a 3-year-old sedan, being sold in a particular city. If several dealerships and private sellers are listing similar models for around $18,000 to $20,000, and buyers are consistently purchasing them within that range, then the market price for that specific used car model in that area is approximately $19,000. This price reflects what buyers are currently willing to pay and what sellers are willing to accept given the car's condition, mileage, and local demand.

• Consider a farmer who has harvested a large crop of organic blueberries. When they go to sell their produce to local grocery stores or at a farmers' market, they will find that other blueberry growers are selling their berries for a certain amount per pound, perhaps $4.50. This $4.50 per pound is the prevailing market price for organic blueberries in that region at that time, influenced by the overall supply of blueberries from all growers and the demand from consumers.

• When a company's stock is traded on a stock exchange, its value fluctuates throughout the day. If Company X's stock is currently trading at $75.25 per share, with many buyers and sellers actively placing orders at or around that figure, then $75.25 is the market price of Company X's stock at that precise moment. This price is a dynamic reflection of investor confidence, company performance, and broader economic factors, all influencing supply and demand for that particular stock.