The main approaches to the interpretation of the notion of «market» are studied, the evolution of the thoughts of economists on the interpretation of this term, along with their systematization, is given. The interpretation of the concept of market from the point of view of the political economy conception that, opposite to the existing ones, describes a set of economic relations among market actors regarding sale of market objects on a definite territory during a certain period of time under free pricing conditions with limited government intervention, freedom of choice and a free disposal of items for sales, is improved. We find it necessary to consider «market» as a generalized concept that describes a certain type of economy and formation of economic relations based on market mechanism. In this sense, market relations are not limited to exchange, and they are found in all commodity-money relations with the help of which production, sale and consumption of foodstuffs are regulated.

The category of «market», in its broad sense, includes several concepts. First of all, it is the understanding of market as “a system of economic relations arising from interaction of commodity and money circulation”; “a market is a system of commodity and money relations arising between the consumer and the seller that includes free pricing mechanism, free entrepreneurship which is carried out on the basis of economic independence, equality and competition of the actors of economy in the fight for the consumer”.

This definition contains both sale relations and relations of property and production, mechanism of distribution and consumption, social and economic relations. Moreover, it should be noted that some other definitions of «market» that successfully characterize its certain features can be given. However, it is not possible to argue that it is a complete highlighting of the essence of «market» as an economic category since «market» is a complex social and economic phenomenon that shows itself in different ways regarding natural and economic, political and historical peculiarities of the economy of each country.

It should be mentioned that the relations of government intervention in the system of market economy functioning substantially change at different stages of its establishment and development.

The author classification of factors having influence on the development of market environment is offered. The functioning of the market is formed via institutions that characterize a level of interaction of structures, consumers, impacts of regulation on competitive policy of companies, redistribution of the output. Slow adaptation of market institutions to economic conditions; unsatisfactory modification of former and new market institutions; uncoordinated system of regulation of the agricultural market and institutions with traditional economic relations; the lack of systematic and integrated sustainable development and regulation of the agricultural market belong to the main problems of institutional nature of development of market conditions in the agricultural sector of the economy that can be pointed out.

Second, it is production of public goods and services that also include the goods for national defense, services for public administration and police, roads, education, health care, and, partly, science and consultancy, etc. It is the state that provides with the goods and services mentioned. It is obvious that Adam Smith meant this particular activity of the state while formulating his famous “three functions of the Crown”. He noted that the legal right of the state is to do what people alone are powerless to do at all, or they are not able to do very well.

Third, it is minimization of transaction costs that the state may bear. For example, parts of information support for the market, which can reduce transaction costs of private firms, ensure simplification of the state apparatus, legal system and so on.

Fourth, it is public health care which is the implementation of the state control of food quality, as well as debarment of low-quality products, harmful to people, for such products not to enter the market.

Fifth, it is stabilization of macroeconomic fluctuations shown in the responsibility of the state for taking counteractions to macroeconomic fluctuations, preventing unemployment and significant increase in the level of inflation, as well as for ensuring a certain economic growth and welfare of the nation.

Key words: market, economic relations, commodity and money exchange.