market-clearing
UK[ˈmɑːkɪt ˌklɪərɪŋ]US[ˈmɑːrkɪt ˌklɪrɪŋ]
adj
(of a price) allowing all goods or services supplied to be sold and all demand to be satisfied, so that there is no surplus or shortage.
adj
relating to or describing the condition in which supply and demand are in balance.
Morpheme Breakdown
market
clearing
market
market
clearing
making clear
Etymology
The compound term "market-clearing" is a modern economic construct built from two foundational English words. "Market" originates from the Latin mercatus, referring to the place and process of trade. "Clearing" derives from the concept of making something clear, free, or unobstructed, applied here in a figurative economic sense. The term's logic is vividly literal: it describes the theoretical price point at which the marketplace is "cleared" of excess supply or unmet demand, achieving an equilibrium. This conceptual blend of a concrete marketplace with the abstract process of resolution encapsulates a core model in classical economic theory.
Analysis
Structure: market (market) + clearing (making clear)
- market: From Latin mercatus (trade, marketplace). Functions as the primary noun denoting the sphere of commercial activity.
- clearing: From the verb clear, of Old French/Latin origin, with the suffix -ing forming a present participle/adjective. Functions to describe the action or state of making the market free of imbalance.
Examples
The market-clearing price for wheat was determined by the intersection of supply and demand curves.
Economists often use market-clearing models to analyze competitive equilibrium.
If wages were fully flexible, they would adjust to a market-clearing level, eliminating unemployment.