What drives and disciplines markets?

Question

Quizplus · Accepted Answer

Prices and profits drive markets as they signal supply and demand and incentivize producers to allocate resources efficiently. Disciplining of markets occurs through competition and the pursuit of profits, forcing inefficient firms out of the market. Equity and efficiency are important goals, but not necessarily drivers or disciplines of markets. The ceteris paribus assumption is a methodological tool used in economic analysis, but not a driver or disciplinarian of markets in and of itself.

What Drives and Disciplines Markets