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7 Examples of Market Value

 , April 12, 2018
Market value is the price of an asset or good that can be expected in a fair, open and competitive market where buyers and sellers participate freely. The following are illustrative examples.

Supply & Demand

Market value is driven by supply and demand. Increases in demand increase market value. Increases in supply decrease market value. For example, if home builders increase supply of new homes by 700% in an area this would drive prices down unless demand also increases.

Public Markets

A public market is a market that is open and accessible to the public such as a stock market. Prices on a liquid public market are considered a prime example of a market value. For example, a stock market with thousands of buyers and sellers of a stock competing at the same time to achieve the best price.

Perfect Information

Market value assumes that buyers and sellers are both in possession of the facts that are relevant to a transaction. For example, if insiders sell a stock because they know there is a problem at a company before investors, this may not be considered a market value for the stock.

Arms Length Transaction

Market value assumes that buyers and sellers have no relationship that could influence price. For example, if the CEO of a company buys assets from her company this would not be considered a market price unless the asset was put up for sale to the public with the CEO offering the highest price from multiple bidders.

Fair Market Price

Fair market price is a reasonable estimate of market price that is used for legal, accounting and tax purposes. For example, a CEO might buy an asset from a company at a fair market price based on independent and reputable assessments of a reasonable market value.

Reference Prices

Reference prices are data about recent prices that are used to estimate a fair market price. For example, data for home sales may be compiled to create reasonable estimates of the market price for homes based on market conditions, location, size, type, features and other factors.


An appraisal is a formal opinion of a fair market price formed by an expert in a particular market. This may make use of reference prices, models and other formal methods. Alternatively, it may be based on the expert judgement of an individual based on their experience.
Overview: Market Value
DefinitionThe price of an asset or good that can be expected in a fair, open and competitive market where buyers and sellers participate freely.
Related Concepts


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Added Value
Advanced Economy
Adverse Selection
Animal Spirits
Attention Economics
Bargaining Power
Barriers To Entry
Behavioral Economics
Behavioral Finance
Bounded Growth
Bounded Rationality
Business Cluster
Business Value
Capital Flight
Capital Goods
Circular Economy
Club Theory
Comparative Advantage
Competitive Parity
Cost Competition
Critical Mass
Customary Pricing
Deadweight Loss
Division Of Labor
Economic Activity
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Economic Bad
Economic Context
Economic Development
Economic Growth
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Economies Of Scale
Experience Economy
Extreme Value Theory
Factors Of Production
Failure Demand
Fiscal Dominance
Free Market
Gains From Trade
Giffen Good
Income Distribution
Industrial Complex
Industrial Economy
Inferior Good
Information Asymmetry
Intangible Goods
Intangible Value
Knowledge Economy
Labor Productivity
Long Tail
Marginal Utility
Market Conditions
Market Economy
Market Failure
Market Forces
Market Power
Marketing Economics
Mean Regression
Media Economics
Merit Good
Middle Class
Monetary Policy
Plateau Effect
Predatory Pricing
Price Economics
Price Umbrella
Price War
Pricing Strategy
Profit Motive
Rational Choice Theory
Rent Seeking
Rule Of Three
Search Good
Service Economy
State Capitalism
Sticky Prices
Superior Goods
Supply Shock
Sustainable Economics
Switching Barriers
Threat Of Substitutes
Trade War
Traditional Economy
Unsought Goods
Value Creation
Veblen Goods
Zero-sum Game
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