The market process

Economic analysis tends to take place from two different perspectives. The most natural perspective – because it perceives actual economic activities that take place – is the market process perspective. In the market process perspective, economic actors undertake activities of production and exchange with the intention of improving their perceived well-being, and economic analysis seeks to understand why production and exchange take place, and examines factors that facilitate or hinder production and exchange. In contrast, the equilibrium approach offers a different perspective, looking at what the outcome will be after all profitable exchanges have taken place. Process versus outcome are the two main perspectives from which economists view economic activity.