<p>This is not taken from any book in particular but, in simple terms, actual interaction is when a buyer is going to buy a product (or set of products, from your words) and potential is the one who will suffer <a href="https://en.wikibooks.org/wiki/Transportation_Economics/Costs#Characterizing_Transportation_Costs" rel="nofollow">transportation costs</a> to acquire that same product or set of products and thus they still their acquisition is not yet defined as certain. </p>

CC BY-SA 3.0
2016-01-08T19:04:25.463Z
2016-01-08T19:04:25.463Z
gsilvapt
<p>The traditional representation of a market, with the curves of supply and demand reflects potential transactions: for each price, we can derive the quantity that would be offered or asked. The actual transactions only occur at the market price, but ignoring all other intentions is too restrictive to define a market. </p>

<p>For example, stock exchanges often give the possibility to agents to express their intentions (that is,  the quantity they would offer or buy for a certain price) about a particular security, which will form the bid (supply)  and the ask (demand). Even if the ask and the bid never meet, there is still a market as people are willing to exchange goods, though they cannot find an acceptable compromise. </p>

CC BY-SA 3.0
2016-01-08T20:05:18.693Z
2016-01-08T21:28:42.363Z
2016-01-08T21:28:42.363Z
Hector
<p>In the book "Microeconomics" by Pyndyck and others, the author(s) define a 'market' as a collection of buyers and sellers, who by the actual or potential interaction with each other determine the price of a product or a set of products.</p>

<p>What is the difference between these two terms that the author(s) have taken effort to differentiate?</p>

<macroeconomics><microeconomics><markets>
What is the difference between 'actual' and 'potential' interaction between buyers and sellers?
WorldGov
# What is the difference between 'actual' and 'potential' interaction between buyers and sellers?

(Asked by: username_0 on 2016-01-08)

In the book "Microeconomics" by Pyndyck and others, the author(s) define a 'market' as a collection of buyers and sellers, who by the actual or potential interaction with each other determine the price of a product or a set of products.

What is the difference between these two terms that the author(s) have taken effort to differentiate?

**Tags:** macroeconomics, microeconomics, markets

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## 2 answers

### Answer by username_2 on 2016-01-08. Score: 3 | Accepted answer

The traditional representation of a market, with the curves of supply and demand reflects potential transactions: for each price, we can derive the quantity that would be offered or asked. The actual transactions only occur at the market price, but ignoring all other intentions is too restrictive to define a market.

For example, stock exchanges often give the possibility to agents to express their intentions (that is, the quantity they would offer or buy for a certain price) about a particular security, which will form the bid (supply) and the ask (demand). Even if the ask and the bid never meet, there is still a market as people are willing to exchange goods, though they cannot find an acceptable compromise.


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### Answer by username_1 on 2016-01-08. Score: 0

This is not taken from any book in particular but, in simple terms, actual interaction is when a buyer is going to buy a product (or set of products, from your words) and potential is the one who will suffer [transportation costs](https://en.wikibooks.org/wiki/Transportation_Economics/Costs#Characterizing_Transportation_Costs) to acquire that same product or set of products and thus they still their acquisition is not yet defined as certain.


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