---
title: "How Markets Work"
description: "Buyers and sellers meet in markets for products, work and money; competition pushes prices and wages up or down; supply and demand shifts explain shortages, sales and price spikes; firms, non-profits "
canonical: https://lightmysky.com/learn/civics-and-economics/how-markets-work-mt_IWiQW8Sq2R
source: https://lightmysky.com/learn/civics-and-economics/how-markets-work-mt_IWiQW8Sq2R.md
retrieved: 2026-10-19
---

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# How Markets Work

Buyers and sellers meet in markets for products, work and money; competition pushes prices and wages up or down; supply and demand shifts explain shortages, sales and price spikes; firms, non-profits and unions each play a part

Subject: Civics & Economics · Area: Economics · Ages 11 to 14
Page: https://lightmysky.com/learn/civics-and-economics/how-markets-work-mt_IWiQW8Sq2R

## Ready when they can

- Explain a price change using supply and demand (e.g., 'umbrella prices rise in a sudden storm because demand jumps')
- Describe the labour market as a market (employers buy work, workers sell it, and the wage is the price)
- Distinguish the roles of institutions (e.g., a corporation seeks profit, a union bargains for workers, a charity serves a mission)

## Lesson: How Markets Work

A market is any place where buyers and sellers meet to trade. It could be a farmers market, an online store, or even the market for jobs. Buyers want the lowest price they can get. Sellers want the highest price they can get. The price they agree on balances what both sides want.

*(drawing: A sudden storm makes everyone want an umbrella at once. More buyers chasing the same umbrellas pushes the price up fast.)*

**Example.** Maria babysits on weekends. Families in her neighborhood are the buyers, and Maria is the seller of her time. The price they agree on is her hourly wage. If three families need a sitter on the same night, they may offer Maria more money to win her time.

Markets are not just about goods and jobs. Different institutions play different roles inside them. A company, or firm, is in the market to earn a profit for its owners. A union does not sell products; it bargains with employers so its worker-members get fair pay and safe conditions. A charity is different again: it exists to serve a mission, like feeding families, not to earn profit.

**Tip.** Watch for competition. When many buyers want the same limited thing, prices and wages tend to rise. When many sellers offer the same thing and few buyers want it, prices and wages tend to fall.

**Recap.** Markets are where buyers and sellers meet for goods, jobs, or money, and shifts in supply and demand move prices and wages up or down while firms, unions, and charities each play a different role.

## Practice

13 questions on this page, each with its working shown.

## Needs first

- [Incentives and Choices](https://lightmysky.com/learn/civics-and-economics/incentives-and-choices-mt_KxkoDkbjPy)
- [How the Economy Works](https://lightmysky.com/learn/life-skills/how-the-economy-works-mt_udgPy5oAvR)

## Opens up

- [Demand and Supply as Curves](https://lightmysky.com/learn/civics-and-economics/demand-and-supply-as-curves-mt_FyYrlvzXct)
- [Trade Policy and Barriers](https://lightmysky.com/learn/civics-and-economics/trade-policy-and-barriers-mt_l_l6qXfRle)
- [Inflation, Unemployment and Growth](https://lightmysky.com/learn/civics-and-economics/inflation-unemployment-and-growth-mt_Zr0YyQwtKy)