The Stock Market
The stock market is very close to a perfect competitive market. The price of a stock usually is determined by the market forces of demand and supply of the stock and individual buyers and sellers of the stock have little effect on price (they are price-takers). Resources are mobile as stock is bought and sold frequently. Information about prices and quantities is readily available. Funds flow into stocks and resources flow into uses in which the rate of return. Thus stock prices provide the signal for efficient allocation of investment in the economy. However, imperfections occur here also though the stock market is very close to a perfect competition, for example, sale of huge amount of stocks by a large corporation will certainly affect (depress) the price of it s stocks.
Question
1. Find out the characteristic of National Stock Exchange.
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