FEATURES OF PRICE FORMATION IN A MARKET ECONOMY: THEORETICAL FOUNDATIONS AND EVIDENCE IN UZBEKISTAN

Abstract

The theoretical and practical features of price formation in a market economy are examined with
particular emphasis on the experience of Uzbekistan. The principal factors influencing prices are systematized,
including production costs, supply and demand, market structure, competition, technological development, consumer
purchasing power, macroeconomic conditions, and government regulation. The research methodology is based on
a review and synthesis of theoretical concepts, a comparative analysis of selected foreign pricing systems, and a
descriptive analysis of selected economic indicators for Uzbekistan. The findings demonstrate that price formation
cannot be explained by a single factor. Market prices are primarily determined by the interaction of supply and demand,
while their final level is also significantly influenced by production costs, institutional conditions, and the degree of
competition. Uzbekistan’s experience reflects a gradual transition from administrative price controls toward a system
increasingly based on market principles. At the same time, government regulation continues to play an important role
in essential goods, public utilities, and sectors characterized by natural monopolies. The study identifies relationships
among price dynamics, consumer prices, household income and expenditure, and retail trade activity. The findings
emphasize the need to further improve the pricing system by strengthening competition, enhancing cost efficiency,
ensuring price transparency, and applying targeted government intervention. These measures can contribute to
greater market efficiency while supporting social protection during the continued development of Uzbekistan’s market
economy.