<p>The vast majority of economists subscribe today to the subjective theory of value that was in economics introduced by Jevons,  Walras, and Menger. Subjective theory of value posits that value is subjective. A corollary to that is that there is no correct objective price.</p>
<p>However, if you talk about <em>market</em> price existing as an objective number that is different matter. A market price is <a href="https://www.oxfordreference.com/search?q=market%20price&amp;searchBtn=Search&amp;isQuickSearch=true" rel="nofollow noreferrer">defined</a> as:</p>
<blockquote>
<p>The last traded price or current good quotes by market-makers.</p>
</blockquote>
<p>You can actually record market price in a way that everyone objectively agrees on it. Using the definition above I could check my local grocery store and record that the current market price of 2l milk is let's say 1.5 euro. Nobody can claim that that  is the 'correct' or intrinsic price of milk, different people might have different valuation, but everyone, or at least every economist, can agree that is the 'current quote by market-maker' and thus that it is a market price.</p>
<blockquote>
<p>The government (and most economically illiterate people) usually treat the market price as objective and ofter confound it with the price (the number) that a laber writes on it often ignoring that the owner is not the seller (someone sells at price X but I am not so that must say something about the market price of the asset I own)</p>
</blockquote>
<p>No it seems that you confuse the concept of the 'right/correct/just/intrinsic price' which is inherently subjective with market price which is just last observable price at which someone transacted some item. Market price tells you only the lower boundary for valuation of buyer and upper boundary for valuation of seller, the valuation itself is subjective, but one can objectively record the market price at which transaction took place.</p>
<p>It is also government's prerogative to establish price controls. Government can declare that certain markets are subject to price floors or celling if they wish so. Or even set the prices outright like was done in USSR. A consensus among economists is that in <em>most</em>, but not all, markets pursuing price controls is bad policy that lowers economic welfare (see Mankiw Principles of Economics 5th ed pp 35 and pp 114-123), but still any sovereign government has ultimately the prerogative to set the price on any market as they wish regardless of whether you can sell something at that price or not.</p>
<p><strong>Illustration</strong></p>
<p>To further illustrate the difference between value/willingness to buy (which is subjective) and market price (which is objective) I am also including the following diagram that hopefully explain it:</p>
<p><strong>Willingness to Pay/Value:</strong> buyer’s maximum is called his willingness to
pay, and it measures how much that buyer values the good. (Mankiw Principles of Economics pp 139).</p>
<p><strong>Market Price</strong>:  The last traded price or current good quotes by market-makers.</p>
<p>This can be clearly visualized using demand-supply graph below:
<a href="https://i.sstatic.net/yIB7U.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/yIB7U.png" alt="enter image description here" /></a></p>
<p>The graph above visualizes willingness to pay for someone who is valuing the good more than market price (red), someone who is valuing the good for less than market price (green), these are not <em>directly</em> observable and they are based on people's values.</p>
<p>The market price (blue price) is price at which actually transaction happen in the market. Market price does not need to be equal to your personal subjective valuation (maybe your personal demand would be part of the total market demand somewhere below the market price as the green example in the picture above).</p>
<p>Why is market price objective? Because market price is factual and verifiable. For example, current <strong>market price</strong> of milk in <a href="https://www.ah.nl/producten/zuivel-plantaardig-en-eieren/melk" rel="nofollow noreferrer">Albert Hein</a> online grocery market on 22/1/2021 is €1.75.</p>
<p>Anybody looking at the image below can see the price €1.75. Anyone can objectively verify that. It does not matter that you are not willing to pay €1.75. Your willingness to pay <strong>is subjective</strong>, but the market price of €1.75 <strong>is objective</strong> regardless whether you think that 2l milk has value of €10 or €0.5 (this is not directly observable and this valuation is only in your head). Bottom line, <strong>your personal valuation is not necessary the market price</strong>.</p>
<p>Anyone can agree that there is €1.75 at the picture. Unless you go as far as to deny existence of objective reality independent of humans that is.</p>
<p><a href="https://i.sstatic.net/9AUJ5.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/9AUJ5.png" alt="enter image description here" /></a></p>
<p><strong>Edit:</strong></p>
<p>Since there was some confusion about this, the above applies to both homogenous goods and heterogenous goods. Market prices for both are fully objective.</p>
<p><a href="https://www.artfinder.com/product/looking-at-the-past-window-light-original-oil-painting-gift-pal/" rel="nofollow noreferrer">Here is example</a> of heterogenous good, a unique painting selling for €770. Everyone can objectively agree that  €770 is listed on the picture below. It is objective and empirically verifiable fact that the painting can be bought for  €770. You might disagree with that price because your subjective <strong>valuation</strong> is different from market price, but the market price  €770 is objective fact.</p>
<p><a href="https://i.sstatic.net/CPm47.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/CPm47.jpg" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2022-01-20T20:33:17.030Z
I am not sure I understood what you said is the market price (I would also like a reference on that regarding what is a market price). Is the market price the same as the agreed exchange rate for a single transaction (considering that all goods are unique). If that is so I would like references on that and I want to understand why that is objective (maybe it would be deep on the philosophy of economics) i.e why the single agreement (the single particular price agreed) exists independently of human consciousness.
George Ntoulos
CC BY-SA 4.0
2022-01-20T20:40:08.640Z
@GeorgeNtoulos 1. I already provided reference just click on the link in my text. 2. As explained by definition of the word market price, market price is both “the last traded price” or “current quotes by market-makers”. 3. It is false that all goods are unique. Trivially you can have 2 liters of water separate them into two containers and there is literally no scientific way of distinguishing the two. Some goods can be homogenous that is simply fact. Next in economics goods would be considered homogeneous even if there are some trivial differences like carton of milk that might have 1l of
1muflon1
CC BY-SA 4.0
2022-01-20T20:44:57.473Z
Milk +- 0.001ml. 4. Market price constantly fluctuates and changes. Market price one second might be different than market price in previous second. 5. Markets can be very narrow cafeteria might be completely separate market with separate market price for bread from store just outside the school. 6. It is objective because objective is simply by definition something that represents fact. For example, earth rotates every 24 hour is objective fact
1muflon1
CC BY-SA 4.0
2022-01-20T20:50:46.420Z
Literally world objective is defined by Oxford dictionary “having actual existence outside mind: a matter of objective fact” see pocket Oxford dictionary pp662. This is also close the definition of objective that we use in science. It is a matter of fact that today I bought at my university campus before giving a lecture a coffee for €2.99. That was the price printed on the menu, you can record it by taking picture of it or putting it in a database and every observer will agree that €2.99 was printed on the menu. So €2.99 printed on menu clearly exists outside everyone mind. There are actually
1muflon1
CC BY-SA 4.0
2022-01-20T20:59:01.287Z
Molecules of ink on molecules of paper. Unless you want to subscribe to extreme radical relativism, the postulates that no objective truth, earth could be flat, Sun might not exist, it’s all just illusion - something that is antithesis to science then the fact that the molecules of ink on molecules of paper existed and were formed in a shape €2.99 by definition made €2.99 market price in that small locally defined market of a university cafe at approximately 15:00 GMT+1. Moreover, my card using electro magnetism did informed my bank to transfer 2.99 from my account and there is recording of it
1muflon1
CC BY-SA 4.0
2022-01-20T21:03:51.027Z
Aside from some radical relativistic trolling like oh that was all just in your head there are no other people you are dreaming in a pod in a matrix, that transaction and market price was as objective and as factually verifiable by instruments as possible. Hence in mainstream economics (which like literally all mainstream science) does not endorse extreme radical relativism, every scientist has to believe there is at least some reality outside your head, the price is considered objective, because different observers presented with evidence would agree that I paid 2.99
1muflon1
CC BY-SA 4.0
2022-01-20T22:26:23.533Z
So is the market price the same as the agreed exchange rate for a single transaction? If I say that the market price is X is all that I am saying that some good was traded in a particular instance at price X? Some car has "market price" X am I saying that I can buy/sell it at X (someone is willing to buy or sell it at X) or am I saying that it was bought/sold for X?
George Ntoulos
CC BY-SA 4.0
2022-01-20T22:30:39.263Z
If the last trade of a commodity was for at a price of $500/unit, but people who are willing to sell for $400 can't find buyers, none of whom would spend more than $300, does it make sense to quote a "market price" of $500?    I would think it more sense to say that a market price is whatever price, in the range between bid and ask prices, would be closest to the last transaction price.
supercat
CC BY-SA 4.0
2022-01-20T22:30:56.890Z
@GeorgeNtoulos 1. Please don’t abuse terminology -there is no exchange rate for a single transaction - exchange rate is rate for which one currency like euro converts into another currency like let’s say dollar. 2 yes market price is the amount of money you pay when you buy something. When you say “market price” you are saying** one of the two following**: A) someone actually bought something transaction took place. B) you got quote from market maker - no transaction needed to take place you got quote does not matter you think quote is wrong, you don’t buy anything, the quote itself is also MP
1muflon1
CC BY-SA 4.0
2022-01-20T22:34:14.513Z
The market price being current price that it can be bought or sold. Is that objective? I own a particular house. Doesn't the price it can be currently sold depend on human consciousness. It is basically my subjective value. I may not be willing to sell my house for X or noone may be willing to buy it for X. So X can't be the market price. If someone wills or not depends on their consciousness.
George Ntoulos
CC BY-SA 4.0
2022-01-20T22:35:51.947Z
@supercat if the last trade that occurred at 1/1/2022 was $500/unit then market price at 1/1/2022 was $500/unit. That is the last know market price if there are no further trades or quotes from market makers. Market price does not need to always exist. If nobody is doing transaction and there are no quotes no market price exist, that is valid scenario. Difference between willingness to sell something for 400 and 300 is difference between **valuation** of buyer and seller not market price. There is no guarantee market price will be somewhere in the middle, it might not always exist.
1muflon1
CC BY-SA 4.0
2022-01-20T22:39:25.850Z
@GeorgeNtoulos ? Are you reading what I am writing? Market price **>>is not<< price at which something may be bought or sold** but price at which something **>>is<<** bought or sold, or alternatively (there is a second meaning same as word chair might mean wooden chair or leader of a group), market price can also refer to a simply a price quote as a second meaning. Price quote is objective even if nobody is willing to buy anything at that price. It does not matter someone cannot sell something at quoted price if it’s the price quotes by market maker it can be considered to be market price
1muflon1
CC BY-SA 4.0
2022-01-20T22:41:00.577Z
If a quote was registered with no transaction happening that may well be fictitious. The government says that the market price for houses is X and noone (not even the government itself) is willing to buy fot X. Does that make X the market price just because the government (or some other agent) said so even if they are not willing to buy for X? Is X the market price when the asset (a house) belongs to someone else and either noone is willing to buy it for X or when their (the owner) are not selling it for X is the market price X when I am the owner of the asset but noone is buying for X?
George Ntoulos
CC BY-SA 4.0
2022-01-20T22:50:35.217Z
@GeorgeNtoulos 1. Market price (MP) is not simply any quote but quote by market maker (MM) -pls read what I write because I constantly have to repeat myself. 2 The example you provide has no MM or at least it’s impossible to tell from your description if there is MM or if government plays that role. In example you state answer would be there is no MP. Also government has prerogative to say that maximum price you can charge on market is 100k and once the house is traded or there is a market with market maker quotes the maximum may become MP regardless if you like the MP or not
1muflon1
CC BY-SA 4.0
2022-01-21T18:29:40.783Z
@GeorgeNtoulos: For many purposes, bid and ask prices will be close enough together that any arbitrary number between them will be essentially as good as any other.  If the last transaction happened between the current bid and ask prices, reporting that may for many purposes be as good as any reporting any other arbitrarily-selected price between the bid and ask.  If a stock last sold for \$100 but after that nobody has been willing to pay more than \$1, and since the \$100 sale other people have entered who are willing to sell for \$2, the most someone wanting to sell would get would be \$2.
supercat
CC BY-SA 4.0
2022-01-21T18:32:41.657Z
@GeorgeNtoulos: If one defines "pegged market price" as being the median of current ask, current bit, and last transaction, and the PMP of a stick is \$2, then someone wanting to buy would know that they should expect to pay *at least* \$2, and someone looking to sell would know they should expect to receive *at most* \$2.  That would seem a more useful stat than the last transaction price.
supercat
CC BY-SA 4.0
2022-01-21T19:09:44.977Z
@supercat Pure economics. Economics as an end in themselves. I didn't write anything about usefullness or some application.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:30:58.843Z
Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:31:36.850Z
If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:32:23.183Z
If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.
George Ntoulos
CC BY-SA 4.0
2022-01-21T21:50:04.970Z
@GeorgeNtoulos 1. in economics we don’t use word sales price - that is terminology used in business or accounting but other then that there is no difference between sales price and market price. Different fields have different terminology. 2. If you can buy something like the milk in the picture for 1.75 that is objective price - again please look at the graph I drafted you. Your **valuation** might be lower than the market price that is fine. Market price does not care about how much you value the good or service. On every market there are some people who dislike market price.
1muflon1
CC BY-SA 4.0
2022-01-21T21:53:03.157Z
@GeorgeNtoulos 3. You don’t need to sell the product at maker price. If you again look at the graph I drafted for you, you will see that from seller perspective (supply) there are still sellers that are **not willing to sell at market price** that is fine. Again market price does not care about your personal valuation. If you have higher subjective valuation for your house than market price, don’t sell it. But market price is objective. If a good is only one of the kind (eg Q_max=1) and nobody is willing to sell it there is no market price that is also fine market price does not need to exist
1muflon1
CC BY-SA 4.0
2022-01-21T21:56:39.773Z
5. Yes market price lies between subjective valuation of buyer and seller precisely. But that does not make market price subjective. Market price is objective even if valuations are subjective. Again, Albert hein maybe values the 2l milk at value €0.5, I value the milk at €2, those are subjective values - these subjective values are unverifiable there is no scientific instrument to scan my brain and discover I value milk at €2 (maybe I am lying). The €1.75 market price is verifiable fact as the photo clearly shows. Panel of independent judges can verify that photo shows €1.75
1muflon1
CC BY-SA 4.0
2022-01-21T22:53:08.167Z
I said multiple times that I am not considering milk and it's likes but houses and their likes. The price that something was bought is recorded and need not lie between the subjective valuation of agents (because the subjective valuation can change at any time). The price that something can be bought is unrecorded and necessarily lies between subjective values (the specific price for a transaction will be the result of negotiation but will only exist when there is a space to negotiate). If it is the latter I can't understand why it is objective since the negotiation space is subjective.
George Ntoulos
CC BY-SA 4.0
2022-01-21T22:59:15.030Z
@GeorgeNtoulos 1. The price of something sold laid between subjective valuation at the time of sale. Market price always must lie between subjective valuations of at least 1 seller and 1 buyer on the market or in special case be equal to them at the time it’s recorded. 2. False price at which things can be bought is recorded. Again example is milk. If you don’t like that, then for house it would be price for which someone lists their house for sale. If that price is listed there then seller is willing to sell at that price. If not there simply isn’t market price.
1muflon1
CC BY-SA 4.0
2022-01-21T23:01:09.567Z
@GeorgeNtoulos 3. Act of negotiation is not subjective. You can record the negotiation on video. Negotiation objectively took place. Also once someone haggles and arrives at some price that price is objective once both parties agree regardless of that they were haggling based on their subjective valuations. Objective = empirically verifiable. Market price by definition is empirically verifiable. If there is no verifiable price there is no market price - I don’t understand why you are so stubborn about this. This is definitional. If you don’t like econ terminology fine but that’s what it is
1muflon1
CC BY-SA 4.0
2022-01-22T14:13:03.783Z
Is it simple as that? Is market price the number listed with no metaphysics and no philosophy behind it? The number listed will continue to exist even if all people where extinguished but is the market price the number itself, if everyone is extinguished there is no one left to buy or sell the good so it cannot be sold at the price listed nor was it sold at that price either. The owner subjectively decided the number to write down and if no one want to buy it (it is too high for everyone) it simply can't be sold at that price either.
George Ntoulos
CC BY-SA 4.0
2022-01-22T14:17:59.077Z
@GeorgeNtoulos yes it is as simple as that. The market price is the number listed there.
1muflon1
CC BY-SA 4.0
2022-01-22T14:18:42.830Z
In the general case when goods are not identical is the market price decided by the owner unilateraly without considerations of them actually being able to sell at the number they write down? Shouldn't we consider both sides (Supply and Demand) when thinking of the general case (not identical goods). What happens if that number happens to be the highest subjective valuation and is shared by no one but the owner? No transaction can happen is it still the market price because they wrote it down?
George Ntoulos
CC BY-SA 4.0
2022-01-22T14:21:26.037Z
@GeorgeNtoulos yes no transaction would happen. BTW there is **no** difference whether the good is unique or not. If demand is given by $Q=100-p$ but some monopolist seller foolishly decides to set his market price at 110, then quantity sold at market will be zero. You are not obliged to buy stuff at market price if your subjective valuation disagrees
1muflon1
CC BY-SA 4.0
2022-01-22T14:21:47.343Z
Don't we care about whether the owner can actually sell at the price they listed? They will not be able to sell it a) When they themselves are extinguished; when they die, b) When everyone else dies and c) When that number is higher than everyone else's subjective valuation. Sure they wrote that number down but that doesn't necessarily mean that the good IS or (logical or) CAN be bought/sold at than price.
George Ntoulos
CC BY-SA 4.0
2022-01-22T14:22:58.553Z
@GeorgeNtoulos no we do not care about that. If all people died out that 770 would be the last market price recorded for that painting, that is it. BTW please do not mix objective and human made or something that is part of a human. Your liver is objective, if you die and get cremated there is no liver anymore. That does not make your liver subjective.
1muflon1
CC BY-SA 4.0
2022-01-22T14:25:49.013Z
So market price is the price listed regardless of whether stuff Can or Was bought/sold at that? Is the demand really indeferent?
George Ntoulos
CC BY-SA 4.0
2022-01-22T14:27:15.587Z
@GeorgeNtoulos demand determines the quantity sold at given market price. Demand can change market price, a person who never sells anything may think gee maybe I should change the market price, but the market price is objective. For example, if you do not like color of your wall in your room you can change it, lets say from white to blue. But the wall color itself is fully objective, regardless that your subjective feelings can cause it to change
1muflon1
CC BY-SA 4.0
2022-01-18T20:40:54.737Z
2022-01-22T13:39:18.833Z
2022-01-22T13:39:18.833Z
1muflon1
<p>The market price is the current price at which something may be bought or sold. If a good is not sold or bought at a particular price, then that is not the market price. Whether or not any particular individual thinks that price is too high or too low makes no difference, as the market price is by definition the price that <em>someone</em> is willing to pay/receive for an item.</p>
<p>Suppose the market price for widgets is $100. That means there is someone selling widgets for as little as \$100, and someone willing to buy widgets for as much as \$100. At a price of \$100, people are actually trading widgets for cash. There is no subjective interpretation of the market price, my personal opinion on the value of widgets does not change the fact that the market price is \$100. I might not buy a widget until it costs only \$90, but that doesn't change the fact that widget manufacturers can sell widgets for \$100. A widget manufacturer might think their widgets are worth \$110, but they won't sell any when other manufacturers are selling identical widgets for \$100.</p>
<p>A market price can go up or down depending on subjective sentiment about what something is truly worth, but there is no subjectivity about what the market price is - it is whatever people are paying. Market price is inherently an aggregate measure that doesn't measure preferences of individual consumers - it doesn't really make sense to discuss market price in a scenario where two particular individuals need to agree on a price. In a market of many individuals, so long as <em>some</em> pair of buyer and seller agree on the price, that is the market price.</p>
<p>Now, if all buyers collectively agree that their subjective utility gain from an item is not worth the current market price, then no one will buy, and the market price must fall (since widgets can no longer be sold for $100). But as soon as we reach an equilibrium price where widgets are bought and sold again, there will be a new market price.</p>
<p>TL;DR: The market price is an objective measure that reflects the most recent price at which goods are traded. What that market price <em>is</em> depends on aggregate, subjective beliefs about how much the goods are worth. The market price is unrelated to your personal opinion about whether that good is over/underpriced, but it is related to aggregate subjective beliefs of the market as a whole - if <em>everyone</em> thinks a good is overpriced, the market price must shift.</p>

CC BY-SA 4.0
2022-01-18T21:38:44.613Z
We are assuming homogeneity (identical widgets) when it is not given. We are speaking of gadget A owned by B and he is simply not selling at the supposed market price. You didn't answer the question. You unilateraly assumed the most beneficial scenerio when I will not buy for less than the market price. Consider the situation when noone buys at the market price or when the asset is not sold at that price (a unique asset).
George Ntoulos
CC BY-SA 4.0
2022-01-18T21:56:54.810Z
@GeorgeNtoulos If no one is willing to buy or sell at the current market price, then the market price must move, or else there is no market at all. If widget buyers will only buy for \$90 and widget sellers will only sell for \$110, there is no market for widgets, as no one can find an acceptable trade partner. Agree things get tricky for unique assets, as the utility of market price relies on it being widely applicable. For unique assets, a single person buying an item may not suggest anyone else would, but it's a reasonable stance for a commodity.
Nuclear Hoagie
CC BY-SA 4.0
2022-01-20T12:48:46.297Z
@NuclearHoagie LIBOR used to be the market price of money and a large number of real transactions used it (typically at LIBOR plus an agreed margin) but, as a number of people at the Bank of England said in 2008, it was "the rate at which banks don't lend to each other".
Henry
CC BY-SA 4.0
2022-01-20T22:33:08.620Z
Focusing on the first paragraph. The market price being current price that it can be bought or sold. Is that objective? I own a particular house. Doesn't the price it can be currently sold depend on human consciousness. It is basically my subjective value. I may not be willing to sell my house for X or noone may be willing to buy it for X. So X can't be the market price. If someone wills or not depends on their consciousness.
George Ntoulos
CC BY-SA 4.0
2022-01-20T23:06:33.663Z
@GeorgeNtoulos if you are not willing to sell your house for X, then X is no longer price at which your house can be bought and sold. If something can be bought and sold that is objective, you seriously think thank when you pay your rent (say your rent is \$1000) that number is subjective number? If that would be the case how would anyone ever calculate VAT? How would accounting work? You can't be serious!
WilliamT
CC BY-SA 4.0
2022-01-21T00:41:48.407Z
It is one thing to simply record a transaction. A record of the transaction may be objective. But when it comes to willingness to transact it is another thing. I pay $1000 for rent and that is recorded so it may very well be objective. Now if I am willing to rent an apartment for $1000 is another issue. It is my decision (not even yet disclosed) and I can decide either way completely subjectively (depending on what is my subjective value for staying at that apartment for a given period).
George Ntoulos
CC BY-SA 4.0
2022-01-21T01:22:05.453Z
@GeorgeNtoulos Btw, this is the problem I highlighted in my answer. You are confusing **value**  or**willingness to buy** (which is subjective), and **market price** (objective). Generally market price $\neq$ value or willingness to pay (they might be equal in some cases but **not** generally). You are just confusing these 3 different terms. Market price does not need to be equal to your private valuation. Your private valuation and willingness to buy are fully subjective. Market price is fully objective and exist irrespective how much value you happen to put on something.
1muflon1
CC BY-SA 4.0
2022-01-21T11:23:34.710Z
@1muflon1 Please do not meddle in an other's answer and confuse me because Nuclear Hoagie said a different thing that you did. You said the market price is the price something is/was  bough (past even if immediate so it is just a record) while they said that market price is the price something can be (future even if immediate so it is connected with the willingness to buy and willingness to sell it is no longer a simple record regardless of me changing my mind). You said explicitly Market price is notprice at which something may be bought or sold but price at which something is bought or sold.
George Ntoulos
CC BY-SA 4.0
2022-01-21T11:29:59.297Z
@GeorgeNtoulos 1. I do not meddle in anything people can comment on other’s answers. 2. Can means you have to be able to sell it, if someone is not selling it then you can’t sell it, so it does not mean it is optional to sell it either, I just stressed is because that is what you find in more clear definitions and textbooks, but more loosely someone can also just say can.
1muflon1
CC BY-SA 4.0
2022-01-21T11:41:37.760Z
Is and can are two different things. One makes the Market Price a simple record. Something (a house not a pint of milk) was sold for X I can easily see why something like that may be objective. The other "can" makes it an action of the immediate future and if the transaction will happen or not depends on the willingness to buy and willingness to sell. Is and Can are two completely different things and you said that it market price is the price and which it is sold not the price at which it can be sold. You are confusing me by commenting on an answer that was different that yours.
George Ntoulos
CC BY-SA 4.0
2022-01-21T11:42:41.493Z
Can means you have to be able to sell it, if someone is not selling it then you can’t sell it. Confusing very very confusing. It is my house so the only one that can sell it is me. Someone else can only buy it from me. Isn't it my choise whether to sell my house. Someone want to buy it for X and I simply don't want to sell it for X. X cannot be the market price.
George Ntoulos
CC BY-SA 4.0
2022-01-21T14:35:58.310Z
*A widget manufacturer might think their widgets are worth `$110`, but they won't sell any when other manufacturers are selling identical widgets for `$100`* — that reasoning may apply in an idealised model, but not in the real world. The cost of gathering the advertised price for all widget sellers in town may well exceed $10.
gerrit
CC BY-SA 4.0
2022-01-21T19:31:09.397Z
Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:31:45.973Z
If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:32:31.953Z
If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.
George Ntoulos
CC BY-SA 4.0
2022-01-18T20:47:13.560Z
2022-01-18T20:47:13.560Z
Nuclear Hoagie
<p>The other two up-voted answers are both correct but unnecessarily convoluted for such simple quesiton.</p>
<p>Simple answer is that market price is objective. <a href="https://www.investopedia.com/terms/m/market-price.asp" rel="nofollow noreferrer">Market price</a> is:</p>
<blockquote>
<p>The market price is the current price at which an asset or service can be bought or sold.</p>
</blockquote>
<p>This is as objective as measuring a temperature of a room. You confuse market price and value which is subjective.</p>

CC BY-SA 4.0
2022-01-18T21:44:44.467Z
Is the market price the same then with the single transaction price? A and B agreed to trade C (an asset) for D (an amount). Is D the market price for C? If that is so isn't it subjective? Without human consciousness there are no transactions at all.
George Ntoulos
CC BY-SA 4.0
2022-01-18T21:55:34.547Z
@GeorgeNtoulos subjective is not human made. I sit in my house. The building is objective. Every person would agree that my house is a building that it has white walls, that my room has 4 windows. History is also not subjective, holocaust did happen, that is an objective fact. A and B in history exchanged $D amount of money. That is objective fact. Even if humans would be erased it would be objective fact that happened at some point in history.
csilvia
CC BY-SA 4.0
2022-01-19T23:14:07.493Z
The market price for one particular thing might be objective, but deciding whether two things have the same market price is subjective. Consider second-hand cars: you can look up the "market price" of a 10 year old VW Golf with 120K miles on the clock, but that's no guarantee you can sell your car for that amount.
Michael Kay
CC BY-SA 4.0
2022-01-20T13:54:41.087Z
@MichaelKay how is that relevant? Once the car is sold that will become the objective market price. For rare objects there might be no market price until object is sold.
csilvia
CC BY-SA 4.0
2022-01-20T15:28:53.340Z
It's relevant because in practice the "market price" for cars with this description is an average over a number of sales and each such car is slightly different. It's not like the market price for Microsoft shares, where two shares are totally indistinguishable, nor is it like the market price for original Van Gogh paintings, where each one is completely unique.
Michael Kay
CC BY-SA 4.0
2022-01-20T22:10:18.360Z
@MichaelKay no it isn't. At least not in economics. According to your bio you are programmer so maybe field of programming has some definition of price unrelated to economics.  Market price is price at which something sells. Market price does not exist once and for all. If one share of Microsoft stock sells for \$10 at 12:01 then market price of microsoft stock at 12:01 is \$10. If it sells for \$11 at 12:02 that is the new market price. If two identical goods sell for different amount of money the market price is not simply average price that is nonsensical.
csilvia
CC BY-SA 4.0
2022-01-20T22:11:05.780Z
People sometimes calculate average to aggregate data but that aggregated average would be average market price over some period, not market price. If you have the same commodity as an iron for example, selling at different prices in different location you will have market price for steel in China, Japan, USA and so on. No respected economist would just average different prices and claim that is the market price.
csilvia
CC BY-SA 4.0
2022-01-20T22:17:07.857Z
That does not even make a sense. That is like saying room temperature is not its current temperature but average temperature over day, that is oxymoron
csilvia
CC BY-SA 4.0
2022-01-21T00:24:00.180Z
So you're telling me that when Auto Trader say "Auto Trader’s car valuation tool will give you an accurate market value for your car. To ensure our prices are accurate, [we] update our car valuations daily and combine data from: over 800,000 adverts, over 3,500 dealer websites, values from major car auctions ... " then what they're calculating isn't what economists would call the market price?
Michael Kay
CC BY-SA 4.0
2022-01-21T15:35:35.460Z
@csilvia Temperature is a statistical bulk property.
gerrit
CC BY-SA 4.0
2022-01-21T17:33:15.713Z
@MichaelKay of course it is not... are you even serious right now? you must be joking! That is like asking "so you are telling me that when water bottle says no chemicals, that is not what biology/chemistry considers chemical? Since you may not get it - in biology/chemistry water is a chemical so slogan no chemicals is oxymoron. In that slogan you describe, that would be *estimate* of what is the most *probable* market price. Also, that estimate is not really made by "combining" various market prices together. That is nonsense gibberish. The site has some machine learning algorithm that
csilvia
CC BY-SA 4.0
2022-01-21T17:34:06.217Z
estimates most probable market price for car based on observable characteristics like millage, age of car, brand of car, type of car and so on. That is an estimate of market price, not actual market price. Also it does not make sense to say that market price is somehow combined from other prices. they are not putting prices together, but constricting some estimator function. I can't believe this has to be said out loud but companies in their ads do not often, if ever, use correct jargon. They use words so masses can intuitively understand what they are selling not give them science lecture
csilvia
CC BY-SA 4.0
2022-01-21T19:19:29.610Z
Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:26:01.253Z
If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.
George Ntoulos
CC BY-SA 4.0
2022-01-21T19:30:03.473Z
If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.
George Ntoulos
CC BY-SA 4.0
2022-01-22T02:58:05.703Z
@GeorgeNtoulos dude you are just asking the same thing again and again. This is my last reply to your comments because please take no offense  but this feels like arguing with flat Earther on facebook. If you don't get why market price is objective fine, economics is hard subject. If you don't want to get it because market price being objective conflicts with your ideology fine. If you want you can make more replies to have last word this are mine last.
csilvia
CC BY-SA 4.0
2022-01-22T03:02:39.720Z
First, every sale price is also market price. Second I can't honestly see any distinction between can and is whatsoever. Is just says it is happening right now, can says it happens any time you fancy it to happen. Maybe if it would be may sold I could see the distinction but with can I can't see distinction (no pun intended). Third, if you refuse the sale of your house at price P then your house **can't** be bought at P.  In that case there is simply no market price. If your house can be bought at P then you have to sell it otherwise, the statement that the house can be bought at P was false
csilvia
CC BY-SA 4.0
2022-01-22T03:07:30.440Z
Fourth, it does not matter that the market price for your house cannot be lower than your subjective valuation. That just states that objective market value is bounded by your subjective valuation. Let me give you an example. Your feeling of cold or hot in a room is subjective experience. You staying or leaving in a room is objective fact. Maybe your are wired in such way that every time temperature drops below 10 degrees you will exit room because that is point you feel *subjectively* cold.  However, you leaving the room is *objective* fact regardless that it was caused by subjective feeling
csilvia
CC BY-SA 4.0
2022-01-22T03:08:45.933Z
if my simple explanation above is too difficult for you then I don't think you will get it after longer explanation so I won't continue this discussion, I already wasted too much time. Feel free to have last word if you like to
csilvia
CC BY-SA 4.0
2022-01-22T17:57:38.757Z
@csilvia I asked a serious question in a civil manner and didn't expect such an uncivil answer.
Michael Kay
CC BY-SA 4.0
2022-01-18T21:32:10.860Z
2022-01-18T21:32:10.860Z
csilvia
<p>I think your talking about three different prices and that's the source of your confusion. They can be defined as:</p>
<ul>
<li>bid price - how much buyer is wanting to pay</li>
<li>ask/offer price - for how much seller is wanting to sell</li>
<li>market price - price at which those two prices meet and actual transactions happen</li>
</ul>
<p>Therefore, market price can thought as 'objective price'. Of course this is really simplified picture, as other already wrote in their answers. E.g., there can be too little transactions happening to meaningfully define 'market price' of some unique goods.</p>

CC BY-SA 4.0
2022-01-19T10:24:43.923Z
2022-01-19T10:24:43.923Z
user11153
<p>Is the market price objective, does it exist independently of human consciousness, how do we treat the market price in economics and the philosophy of economics?</p>
<p>The market price is the current price at which an asset or service can be bought or sold.</p>
<p>If it is lower than the owner's indifference price the asset or service wouldn't be sold.
If it is higher than everyone's indifference price the asset or service wouldn't be bought.
If it was shared by all individuals transactions wouldn't occur (there is no loss-seeking).
If it was material a change in expectations or other purely subjective information (a car's first sale was exhausted) would not change the market price.</p>
<p>That leads me to think that the market price is subjective (or at least intersubjective insofar as 2 parties agree on it) and deeply connected to the personal preferences and the utility these persons hold for the asset.</p>
<p>The government (and most economically illiterate people) usually treat the market price as objective and ofter confound it with the price (the number) that a label writes on it often ignoring that the owner is not the seller (someone sells at price X but I am not so that must say something about the market price of the asset I own) and that nobody may be willing to buy at that &quot;market price&quot;. The government says the market price is X and I can't find anyone to sell it for X (not even the government is willing to buy at X).</p>

CC BY-SA 4.0
2022-01-22T14:14:15.347Z
Comments are not for extended discussion; this conversation has been [moved to chat](https://chat.stackexchange.com/rooms/133428/discussion-on-question-by-george-ntoulos-is-the-market-price-objective).
1muflon1
<microeconomics><utility><supply-and-demand><consumer-theory><philosophy-of-economics>
Is the market price objective?
George Ntoulos
# Is the market price objective?

(Asked by: username_0 on 2022-01-18)

Is the market price objective, does it exist independently of human consciousness, how do we treat the market price in economics and the philosophy of economics?

The market price is the current price at which an asset or service can be bought or sold.

If it is lower than the owner's indifference price the asset or service wouldn't be sold.
If it is higher than everyone's indifference price the asset or service wouldn't be bought.
If it was shared by all individuals transactions wouldn't occur (there is no loss-seeking).
If it was material a change in expectations or other purely subjective information (a car's first sale was exhausted) would not change the market price.

That leads me to think that the market price is subjective (or at least intersubjective insofar as 2 parties agree on it) and deeply connected to the personal preferences and the utility these persons hold for the asset.

The government (and most economically illiterate people) usually treat the market price as objective and ofter confound it with the price (the number) that a label writes on it often ignoring that the owner is not the seller (someone sells at price X but I am not so that must say something about the market price of the asset I own) and that nobody may be willing to buy at that "market price". The government says the market price is X and I can't find anyone to sell it for X (not even the government is willing to buy at X).

**Tags:** microeconomics, utility, supply-and-demand, consumer-theory, philosophy-of-economics

> **Comments:**
> **username_1**: Comments are not for extended discussion; this conversation has been [moved to chat](https://chat.stackexchange.com/rooms/133428/discussion-on-question-by-username_0-username_0-is-the-market-price-objective).  

---

## 4 answers

### Answer by username_3 on 2022-01-18. Score: 13

The market price is the current price at which something may be bought or sold. If a good is not sold or bought at a particular price, then that is not the market price. Whether or not any particular individual thinks that price is too high or too low makes no difference, as the market price is by definition the price that *someone* is willing to pay/receive for an item.

Suppose the market price for widgets is $100. That means there is someone selling widgets for as little as \$100, and someone willing to buy widgets for as much as \$100. At a price of \$100, people are actually trading widgets for cash. There is no subjective interpretation of the market price, my personal opinion on the value of widgets does not change the fact that the market price is \$100. I might not buy a widget until it costs only \$90, but that doesn't change the fact that widget manufacturers can sell widgets for \$100. A widget manufacturer might think their widgets are worth \$110, but they won't sell any when other manufacturers are selling identical widgets for \$100.

A market price can go up or down depending on subjective sentiment about what something is truly worth, but there is no subjectivity about what the market price is - it is whatever people are paying. Market price is inherently an aggregate measure that doesn't measure preferences of individual consumers - it doesn't really make sense to discuss market price in a scenario where two particular individuals need to agree on a price. In a market of many individuals, so long as *some* pair of buyer and seller agree on the price, that is the market price.

Now, if all buyers collectively agree that their subjective utility gain from an item is not worth the current market price, then no one will buy, and the market price must fall (since widgets can no longer be sold for $100). But as soon as we reach an equilibrium price where widgets are bought and sold again, there will be a new market price.

TL;DR: The market price is an objective measure that reflects the most recent price at which goods are traded. What that market price *is* depends on aggregate, subjective beliefs about how much the goods are worth. The market price is unrelated to your personal opinion about whether that good is over/underpriced, but it is related to aggregate subjective beliefs of the market as a whole - if *everyone* thinks a good is overpriced, the market price must shift.

> **Comments:**
> **username_0**: We are assuming homogeneity (identical widgets) when it is not given. We are speaking of gadget A owned by B and he is simply not selling at the supposed market price. You didn't answer the question. You unilateraly assumed the most beneficial scenerio when I will not buy for less than the market price. Consider the situation when noone buys at the market price or when the asset is not sold at that price (a unique asset).  
> **username_3**: @username_0 If no one is willing to buy or sell at the current market price, then the market price must move, or else there is no market at all. If widget buyers will only buy for \$90 and widget sellers will only sell for \$110, there is no market for widgets, as no one can find an acceptable trade partner. Agree things get tricky for unique assets, as the utility of market price relies on it being widely applicable. For unique assets, a single person buying an item may not suggest anyone else would, but it's a reasonable stance for a commodity.  
> **username_4**: @username_3 LIBOR used to be the market price of money and a large number of real transactions used it (typically at LIBOR plus an agreed margin) but, as a number of people at the Bank of England said in 2008, it was "the rate at which banks don't lend to each other".  
> **username_0**: Focusing on the first paragraph. The market price being current price that it can be bought or sold. Is that objective? I own a particular house. Doesn't the price it can be currently sold depend on human consciousness. It is basically my subjective value. I may not be willing to sell my house for X or noone may be willing to buy it for X. So X can't be the market price. If someone wills or not depends on their consciousness.  
> **username_5**: @username_0 if you are not willing to sell your house for X, then X is no longer price at which your house can be bought and sold. If something can be bought and sold that is objective, you seriously think thank when you pay your rent (say your rent is \$1000) that number is subjective number? If that would be the case how would anyone ever calculate VAT? How would accounting work? You can't be serious!  
> **username_0**: It is one thing to simply record a transaction. A record of the transaction may be objective. But when it comes to willingness to transact it is another thing. I pay $1000 for rent and that is recorded so it may very well be objective. Now if I am willing to rent an apartment for $1000 is another issue. It is my decision (not even yet disclosed) and I can decide either way completely subjectively (depending on what is my subjective value for staying at that apartment for a given period).  
> **username_1**: @username_0 Btw, this is the problem I highlighted in my answer. You are confusing **value**  or**willingness to buy** (which is subjective), and **market price** (objective). Generally market price $\neq$ value or willingness to pay (they might be equal in some cases but **not** generally). You are just confusing these 3 different terms. Market price does not need to be equal to your private valuation. Your private valuation and willingness to buy are fully subjective. Market price is fully objective and exist irrespective how much value you happen to put on something.  
> **username_0**: @username_1 Please do not meddle in an other's answer and confuse me because username_3 username_3 said a different thing that you did. You said the market price is the price something is/was  bough (past even if immediate so it is just a record) while they said that market price is the price something can be (future even if immediate so it is connected with the willingness to buy and willingness to sell it is no longer a simple record regardless of me changing my mind). You said explicitly Market price is notprice at which something may be bought or sold but price at which something is bought or sold.  
> **username_1**: @username_0 1. I do not meddle in anything people can comment on other’s answers. 2. Can means you have to be able to sell it, if someone is not selling it then you can’t sell it, so it does not mean it is optional to sell it either, I just stressed is because that is what you find in more clear definitions and textbooks, but more loosely someone can also just say can.  
> **username_0**: Is and can are two different things. One makes the Market Price a simple record. Something (a house not a pint of milk) was sold for X I can easily see why something like that may be objective. The other "can" makes it an action of the immediate future and if the transaction will happen or not depends on the willingness to buy and willingness to sell. Is and Can are two completely different things and you said that it market price is the price and which it is sold not the price at which it can be sold. You are confusing me by commenting on an answer that was different that yours.  
> **username_0**: Can means you have to be able to sell it, if someone is not selling it then you can’t sell it. Confusing very very confusing. It is my house so the only one that can sell it is me. Someone else can only buy it from me. Isn't it my choise whether to sell my house. Someone want to buy it for X and I simply don't want to sell it for X. X cannot be the market price.  
> **username_6**: *A widget manufacturer might think their widgets are worth `$110`, but they won't sell any when other manufacturers are selling identical widgets for `$100`* — that reasoning may apply in an idealised model, but not in the real world. The cost of gathering the advertised price for all widget sellers in town may well exceed $10.  
> **username_0**: Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.  
> **username_0**: If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.  
> **username_0**: If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.  

---

### Answer by username_1 on 2022-01-18. Score: 9

The vast majority of economists subscribe today to the subjective theory of value that was in economics introduced by Jevons, Walras, and Menger. Subjective theory of value posits that value is subjective. A corollary to that is that there is no correct objective price.

However, if you talk about *market* price existing as an objective number that is different matter. A market price is [defined](https://www.oxfordreference.com/search?q=market%20price&searchBtn=Search&isQuickSearch=true) as:

> The last traded price or current good quotes by market-makers.

You can actually record market price in a way that everyone objectively agrees on it. Using the definition above I could check my local grocery store and record that the current market price of 2l milk is let's say 1.5 euro. Nobody can claim that that is the 'correct' or intrinsic price of milk, different people might have different valuation, but everyone, or at least every economist, can agree that is the 'current quote by market-maker' and thus that it is a market price.

> The government (and most economically illiterate people) usually treat the market price as objective and ofter confound it with the price (the number) that a laber writes on it often ignoring that the owner is not the seller (someone sells at price X but I am not so that must say something about the market price of the asset I own)

No it seems that you confuse the concept of the 'right/correct/just/intrinsic price' which is inherently subjective with market price which is just last observable price at which someone transacted some item. Market price tells you only the lower boundary for valuation of buyer and upper boundary for valuation of seller, the valuation itself is subjective, but one can objectively record the market price at which transaction took place.

It is also government's prerogative to establish price controls. Government can declare that certain markets are subject to price floors or celling if they wish so. Or even set the prices outright like was done in USSR. A consensus among economists is that in *most*, but not all, markets pursuing price controls is bad policy that lowers economic welfare (see Mankiw Principles of Economics 5th ed pp 35 and pp 114-123), but still any sovereign government has ultimately the prerogative to set the price on any market as they wish regardless of whether you can sell something at that price or not.

**Illustration**

To further illustrate the difference between value/willingness to buy (which is subjective) and market price (which is objective) I am also including the following diagram that hopefully explain it:

**Willingness to Pay/Value:** buyer’s maximum is called his willingness to
pay, and it measures how much that buyer values the good. (Mankiw Principles of Economics pp 139).

**Market Price**: The last traded price or current good quotes by market-makers.

This can be clearly visualized using demand-supply graph below:
[![enter image description here](https://i.sstatic.net/yIB7U.png)](https://i.sstatic.net/yIB7U.png)

The graph above visualizes willingness to pay for someone who is valuing the good more than market price (red), someone who is valuing the good for less than market price (green), these are not *directly* observable and they are based on people's values.

The market price (blue price) is price at which actually transaction happen in the market. Market price does not need to be equal to your personal subjective valuation (maybe your personal demand would be part of the total market demand somewhere below the market price as the green example in the picture above).

Why is market price objective? Because market price is factual and verifiable. For example, current **market price** of milk in [Albert Hein](https://www.ah.nl/producten/zuivel-plantaardig-en-eieren/melk) online grocery market on 22/1/2021 is €1.75.

Anybody looking at the image below can see the price €1.75. Anyone can objectively verify that. It does not matter that you are not willing to pay €1.75. Your willingness to pay **is subjective**, but the market price of €1.75 **is objective** regardless whether you think that 2l milk has value of €10 or €0.5 (this is not directly observable and this valuation is only in your head). Bottom line, **your personal valuation is not necessary the market price**.

Anyone can agree that there is €1.75 at the picture. Unless you go as far as to deny existence of objective reality independent of humans that is.

[![enter image description here](https://i.sstatic.net/9AUJ5.png)](https://i.sstatic.net/9AUJ5.png)

**Edit:**

Since there was some confusion about this, the above applies to both homogenous goods and heterogenous goods. Market prices for both are fully objective.

[Here is example](https://www.artfinder.com/product/looking-at-the-past-window-light-original-oil-painting-gift-pal/) of heterogenous good, a unique painting selling for €770. Everyone can objectively agree that €770 is listed on the picture below. It is objective and empirically verifiable fact that the painting can be bought for €770. You might disagree with that price because your subjective **valuation** is different from market price, but the market price €770 is objective fact.

[![enter image description here](https://i.sstatic.net/CPm47.jpg)](https://i.sstatic.net/CPm47.jpg)

> **Comments:**
> **username_0**: I am not sure I understood what you said is the market price (I would also like a reference on that regarding what is a market price). Is the market price the same as the agreed exchange rate for a single transaction (considering that all goods are unique). If that is so I would like references on that and I want to understand why that is objective (maybe it would be deep on the philosophy of economics) i.e why the single agreement (the single particular price agreed) exists independently of human consciousness.  
> **username_1**: @username_0 1. I already provided reference just click on the link in my text. 2. As explained by definition of the word market price, market price is both “the last traded price” or “current quotes by market-makers”. 3. It is false that all goods are unique. Trivially you can have 2 liters of water separate them into two containers and there is literally no scientific way of distinguishing the two. Some goods can be homogenous that is simply fact. Next in economics goods would be considered homogeneous even if there are some trivial differences like carton of milk that might have 1l of  
> **username_1**: Milk +- 0.001ml. 4. Market price constantly fluctuates and changes. Market price one second might be different than market price in previous second. 5. Markets can be very narrow cafeteria might be completely separate market with separate market price for bread from store just outside the school. 6. It is objective because objective is simply by definition something that represents fact. For example, earth rotates every 24 hour is objective fact  
> **username_1**: Literally world objective is defined by Oxford dictionary “having actual existence outside mind: a matter of objective fact” see pocket Oxford dictionary pp662. This is also close the definition of objective that we use in science. It is a matter of fact that today I bought at my university campus before giving a lecture a coffee for €2.99. That was the price printed on the menu, you can record it by taking picture of it or putting it in a database and every observer will agree that €2.99 was printed on the menu. So €2.99 printed on menu clearly exists outside everyone mind. There are actually  
> **username_1**: Molecules of ink on molecules of paper. Unless you want to subscribe to extreme radical relativism, the postulates that no objective truth, earth could be flat, Sun might not exist, it’s all just illusion - something that is antithesis to science then the fact that the molecules of ink on molecules of paper existed and were formed in a shape €2.99 by definition made €2.99 market price in that small locally defined market of a university cafe at approximately 15:00 GMT+1. Moreover, my card using electro magnetism did informed my bank to transfer 2.99 from my account and there is recording of it  
> **username_1**: Aside from some radical relativistic trolling like oh that was all just in your head there are no other people you are dreaming in a pod in a matrix, that transaction and market price was as objective and as factually verifiable by instruments as possible. Hence in mainstream economics (which like literally all mainstream science) does not endorse extreme radical relativism, every scientist has to believe there is at least some reality outside your head, the price is considered objective, because different observers presented with evidence would agree that I paid 2.99  
> **username_0**: So is the market price the same as the agreed exchange rate for a single transaction? If I say that the market price is X is all that I am saying that some good was traded in a particular instance at price X? Some car has "market price" X am I saying that I can buy/sell it at X (someone is willing to buy or sell it at X) or am I saying that it was bought/sold for X?  
> **username_2**: If the last trade of a commodity was for at a price of $500/unit, but people who are willing to sell for $400 can't find buyers, none of whom would spend more than $300, does it make sense to quote a "market price" of $500?    I would think it more sense to say that a market price is whatever price, in the range between bid and ask prices, would be closest to the last transaction price.  
> **username_1**: @username_0 1. Please don’t abuse terminology -there is no exchange rate for a single transaction - exchange rate is rate for which one currency like euro converts into another currency like let’s say dollar. 2 yes market price is the amount of money you pay when you buy something. When you say “market price” you are saying** one of the two following**: A) someone actually bought something transaction took place. B) you got quote from market maker - no transaction needed to take place you got quote does not matter you think quote is wrong, you don’t buy anything, the quote itself is also MP  
> **username_0**: The market price being current price that it can be bought or sold. Is that objective? I own a particular house. Doesn't the price it can be currently sold depend on human consciousness. It is basically my subjective value. I may not be willing to sell my house for X or noone may be willing to buy it for X. So X can't be the market price. If someone wills or not depends on their consciousness.  
> **username_1**: @username_2 if the last trade that occurred at 1/1/2022 was $500/unit then market price at 1/1/2022 was $500/unit. That is the last know market price if there are no further trades or quotes from market makers. Market price does not need to always exist. If nobody is doing transaction and there are no quotes no market price exist, that is valid scenario. Difference between willingness to sell something for 400 and 300 is difference between **valuation** of buyer and seller not market price. There is no guarantee market price will be somewhere in the middle, it might not always exist.  
> **username_1**: @username_0 ? Are you reading what I am writing? Market price **>>is not<< price at which something may be bought or sold** but price at which something **>>is<<** bought or sold, or alternatively (there is a second meaning same as word chair might mean wooden chair or leader of a group), market price can also refer to a simply a price quote as a second meaning. Price quote is objective even if nobody is willing to buy anything at that price. It does not matter someone cannot sell something at quoted price if it’s the price quotes by market maker it can be considered to be market price  
> **username_0**: If a quote was registered with no transaction happening that may well be fictitious. The government says that the market price for houses is X and noone (not even the government itself) is willing to buy fot X. Does that make X the market price just because the government (or some other agent) said so even if they are not willing to buy for X? Is X the market price when the asset (a house) belongs to someone else and either noone is willing to buy it for X or when their (the owner) are not selling it for X is the market price X when I am the owner of the asset but noone is buying for X?  
> **username_1**: @username_0 1. Market price (MP) is not simply any quote but quote by market maker (MM) -pls read what I write because I constantly have to repeat myself. 2 The example you provide has no MM or at least it’s impossible to tell from your description if there is MM or if government plays that role. In example you state answer would be there is no MP. Also government has prerogative to say that maximum price you can charge on market is 100k and once the house is traded or there is a market with market maker quotes the maximum may become MP regardless if you like the MP or not  
> **username_2**: @username_0: For many purposes, bid and ask prices will be close enough together that any arbitrary number between them will be essentially as good as any other.  If the last transaction happened between the current bid and ask prices, reporting that may for many purposes be as good as any reporting any other arbitrarily-selected price between the bid and ask.  If a stock last sold for \$100 but after that nobody has been willing to pay more than \$1, and since the \$100 sale other people have entered who are willing to sell for \$2, the most someone wanting to sell would get would be \$2.  
> **username_2**: @username_0: If one defines "pegged market price" as being the median of current ask, current bit, and last transaction, and the PMP of a stick is \$2, then someone wanting to buy would know that they should expect to pay *at least* \$2, and someone looking to sell would know they should expect to receive *at most* \$2.  That would seem a more useful stat than the last transaction price.  
> **username_0**: @username_2 Pure economics. Economics as an end in themselves. I didn't write anything about usefullness or some application.  
> **username_0**: Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.  
> **username_0**: If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.  
> **username_0**: If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.  
> **username_1**: @username_0 1. in economics we don’t use word sales price - that is terminology used in business or accounting but other then that there is no difference between sales price and market price. Different fields have different terminology. 2. If you can buy something like the milk in the picture for 1.75 that is objective price - again please look at the graph I drafted you. Your **valuation** might be lower than the market price that is fine. Market price does not care about how much you value the good or service. On every market there are some people who dislike market price.  
> **username_1**: @username_0 3. You don’t need to sell the product at maker price. If you again look at the graph I drafted for you, you will see that from seller perspective (supply) there are still sellers that are **not willing to sell at market price** that is fine. Again market price does not care about your personal valuation. If you have higher subjective valuation for your house than market price, don’t sell it. But market price is objective. If a good is only one of the kind (eg Q_max=1) and nobody is willing to sell it there is no market price that is also fine market price does not need to exist  
> **username_1**: 5. Yes market price lies between subjective valuation of buyer and seller precisely. But that does not make market price subjective. Market price is objective even if valuations are subjective. Again, Albert hein maybe values the 2l milk at value €0.5, I value the milk at €2, those are subjective values - these subjective values are unverifiable there is no scientific instrument to scan my brain and discover I value milk at €2 (maybe I am lying). The €1.75 market price is verifiable fact as the photo clearly shows. Panel of independent judges can verify that photo shows €1.75  
> **username_0**: I said multiple times that I am not considering milk and it's likes but houses and their likes. The price that something was bought is recorded and need not lie between the subjective valuation of agents (because the subjective valuation can change at any time). The price that something can be bought is unrecorded and necessarily lies between subjective values (the specific price for a transaction will be the result of negotiation but will only exist when there is a space to negotiate). If it is the latter I can't understand why it is objective since the negotiation space is subjective.  
> **username_1**: @username_0 1. The price of something sold laid between subjective valuation at the time of sale. Market price always must lie between subjective valuations of at least 1 seller and 1 buyer on the market or in special case be equal to them at the time it’s recorded. 2. False price at which things can be bought is recorded. Again example is milk. If you don’t like that, then for house it would be price for which someone lists their house for sale. If that price is listed there then seller is willing to sell at that price. If not there simply isn’t market price.  
> **username_1**: @username_0 3. Act of negotiation is not subjective. You can record the negotiation on video. Negotiation objectively took place. Also once someone haggles and arrives at some price that price is objective once both parties agree regardless of that they were haggling based on their subjective valuations. Objective = empirically verifiable. Market price by definition is empirically verifiable. If there is no verifiable price there is no market price - I don’t understand why you are so stubborn about this. This is definitional. If you don’t like econ terminology fine but that’s what it is  
> **username_0**: Is it simple as that? Is market price the number listed with no metaphysics and no philosophy behind it? The number listed will continue to exist even if all people where extinguished but is the market price the number itself, if everyone is extinguished there is no one left to buy or sell the good so it cannot be sold at the price listed nor was it sold at that price either. The owner subjectively decided the number to write down and if no one want to buy it (it is too high for everyone) it simply can't be sold at that price either.  
> **username_1**: @username_0 yes it is as simple as that. The market price is the number listed there.  
> **username_0**: In the general case when goods are not identical is the market price decided by the owner unilateraly without considerations of them actually being able to sell at the number they write down? Shouldn't we consider both sides (Supply and Demand) when thinking of the general case (not identical goods). What happens if that number happens to be the highest subjective valuation and is shared by no one but the owner? No transaction can happen is it still the market price because they wrote it down?  
> **username_1**: @username_0 yes no transaction would happen. BTW there is **no** difference whether the good is unique or not. If demand is given by $Q=100-p$ but some monopolist seller foolishly decides to set his market price at 110, then quantity sold at market will be zero. You are not obliged to buy stuff at market price if your subjective valuation disagrees  
> **username_0**: Don't we care about whether the owner can actually sell at the price they listed? They will not be able to sell it a) When they themselves are extinguished; when they die, b) When everyone else dies and c) When that number is higher than everyone else's subjective valuation. Sure they wrote that number down but that doesn't necessarily mean that the good IS or (logical or) CAN be bought/sold at than price.  
> **username_1**: @username_0 no we do not care about that. If all people died out that 770 would be the last market price recorded for that painting, that is it. BTW please do not mix objective and human made or something that is part of a human. Your liver is objective, if you die and get cremated there is no liver anymore. That does not make your liver subjective.  
> **username_0**: So market price is the price listed regardless of whether stuff Can or Was bought/sold at that? Is the demand really indeferent?  
> **username_1**: @username_0 demand determines the quantity sold at given market price. Demand can change market price, a person who never sells anything may think gee maybe I should change the market price, but the market price is objective. For example, if you do not like color of your wall in your room you can change it, lets say from white to blue. But the wall color itself is fully objective, regardless that your subjective feelings can cause it to change  

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### Answer by username_7 on 2022-01-18. Score: 4

The other two up-voted answers are both correct but unnecessarily convoluted for such simple quesiton.

Simple answer is that market price is objective. [Market price](https://www.investopedia.com/terms/m/market-price.asp) is:

> The market price is the current price at which an asset or service can be bought or sold.

This is as objective as measuring a temperature of a room. You confuse market price and value which is subjective.

> **Comments:**
> **username_0**: Is the market price the same then with the single transaction price? A and B agreed to trade C (an asset) for D (an amount). Is D the market price for C? If that is so isn't it subjective? Without human consciousness there are no transactions at all.  
> **username_7**: @username_0 subjective is not human made. I sit in my house. The building is objective. Every person would agree that my house is a building that it has white walls, that my room has 4 windows. History is also not subjective, holocaust did happen, that is an objective fact. A and B in history exchanged $D amount of money. That is objective fact. Even if humans would be erased it would be objective fact that happened at some point in history.  
> **username_8**: The market price for one particular thing might be objective, but deciding whether two things have the same market price is subjective. Consider second-hand cars: you can look up the "market price" of a 10 year old VW Golf with 120K miles on the clock, but that's no guarantee you can sell your car for that amount.  
> **username_7**: @username_8 how is that relevant? Once the car is sold that will become the objective market price. For rare objects there might be no market price until object is sold.  
> **username_8**: It's relevant because in practice the "market price" for cars with this description is an average over a number of sales and each such car is slightly different. It's not like the market price for Microsoft shares, where two shares are totally indistinguishable, nor is it like the market price for original Van Gogh paintings, where each one is completely unique.  
> **username_7**: @username_8 no it isn't. At least not in economics. According to your bio you are programmer so maybe field of programming has some definition of price unrelated to economics.  Market price is price at which something sells. Market price does not exist once and for all. If one share of Microsoft stock sells for \$10 at 12:01 then market price of microsoft stock at 12:01 is \$10. If it sells for \$11 at 12:02 that is the new market price. If two identical goods sell for different amount of money the market price is not simply average price that is nonsensical.  
> **username_7**: People sometimes calculate average to aggregate data but that aggregated average would be average market price over some period, not market price. If you have the same commodity as an iron for example, selling at different prices in different location you will have market price for steel in China, Japan, USA and so on. No respected economist would just average different prices and claim that is the market price.  
> **username_7**: That does not even make a sense. That is like saying room temperature is not its current temperature but average temperature over day, that is oxymoron  
> **username_8**: So you're telling me that when Auto Trader say "Auto Trader’s car valuation tool will give you an accurate market value for your car. To ensure our prices are accurate, [we] update our car valuations daily and combine data from: over 800,000 adverts, over 3,500 dealer websites, values from major car auctions ... " then what they're calculating isn't what economists would call the market price?  
> **username_6**: @username_7 Temperature is a statistical bulk property.  
> **username_7**: @username_8 of course it is not... are you even serious right now? you must be joking! That is like asking "so you are telling me that when water bottle says no chemicals, that is not what biology/chemistry considers chemical? Since you may not get it - in biology/chemistry water is a chemical so slogan no chemicals is oxymoron. In that slogan you describe, that would be *estimate* of what is the most *probable* market price. Also, that estimate is not really made by "combining" various market prices together. That is nonsense gibberish. The site has some machine learning algorithm that  
> **username_7**: estimates most probable market price for car based on observable characteristics like millage, age of car, brand of car, type of car and so on. That is an estimate of market price, not actual market price. Also it does not make sense to say that market price is somehow combined from other prices. they are not putting prices together, but constricting some estimator function. I can't believe this has to be said out loud but companies in their ads do not often, if ever, use correct jargon. They use words so masses can intuitively understand what they are selling not give them science lecture  
> **username_0**: Isn't there a difference between sale price and market price? I am confused in my mind there is a very clear disctinction between **IS** and **CAN** one is in the past (even if immediate) so the price that something is sold is recorded (Some house was sold for X or is being sold for X the counter parties have agreed and the price is/has been recorded) while the other is in the future (even if immediate) that one depends on the willingness to pay and the willingness to sell if it is the latter I can't see how that is objective.  
> **username_0**: If someone wants to buy my house for X I can simply refuse to sell it for X. The market price for my house (the price that anyone can buy it) depends on me on my willingness to sell. The market price (as long as it is the price that my house can be bought) can't be any lower that my subjective value for it. If I want to sell my house for X people can refuse to buy it. I can't sell it for more than the highest subjective value. If everyone values it for less than X I will simply not be able to sell it.  
> **username_0**: If the owner's subjective valuation is the highest of all agents' then the asset can't be sold at all. It may have been bought for less than X (if the market price is the price it was bought, the last price recorded it will be less than X the owner's subjective valuation) but it can not currently be sold for X. The price at which something can be sold always lies between the subjective valuation of the owner and the highest valuation of someone else. It can't be lower than the owners subjective valuation but it can't be higher that the highest subjective valuation out of everyone else's.  
> **username_7**: @username_0 dude you are just asking the same thing again and again. This is my last reply to your comments because please take no offense  but this feels like arguing with flat Earther on facebook. If you don't get why market price is objective fine, economics is hard subject. If you don't want to get it because market price being objective conflicts with your ideology fine. If you want you can make more replies to have last word this are mine last.  
> **username_7**: First, every sale price is also market price. Second I can't honestly see any distinction between can and is whatsoever. Is just says it is happening right now, can says it happens any time you fancy it to happen. Maybe if it would be may sold I could see the distinction but with can I can't see distinction (no pun intended). Third, if you refuse the sale of your house at price P then your house **can't** be bought at P.  In that case there is simply no market price. If your house can be bought at P then you have to sell it otherwise, the statement that the house can be bought at P was false  
> **username_7**: Fourth, it does not matter that the market price for your house cannot be lower than your subjective valuation. That just states that objective market value is bounded by your subjective valuation. Let me give you an example. Your feeling of cold or hot in a room is subjective experience. You staying or leaving in a room is objective fact. Maybe your are wired in such way that every time temperature drops below 10 degrees you will exit room because that is point you feel *subjectively* cold.  However, you leaving the room is *objective* fact regardless that it was caused by subjective feeling  
> **username_7**: if my simple explanation above is too difficult for you then I don't think you will get it after longer explanation so I won't continue this discussion, I already wasted too much time. Feel free to have last word if you like to  
> **username_8**: @username_7 I asked a serious question in a civil manner and didn't expect such an uncivil answer.  

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### Answer by username_9 on 2022-01-19. Score: 3

I think your talking about three different prices and that's the source of your confusion. They can be defined as:

* bid price - how much buyer is wanting to pay
* ask/offer price - for how much seller is wanting to sell
* market price - price at which those two prices meet and actual transactions happen

Therefore, market price can thought as 'objective price'. Of course this is really simplified picture, as other already wrote in their answers. E.g., there can be too little transactions happening to meaningfully define 'market price' of some unique goods.


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