You must all have visited markets with your parents to buy groceries and other necessary stuffs. So in this chapter, let us learn the meaning of the market and various types of market along with examples.
Definition of market:
Economists described a market as coming together of the buyers and sellers, i.e. an arrangement where buyers and sellers come in direct or indirect contact to buy/sell goods and services.
For example, the market for books will constitute all the sellers and buyers of books. The market for dresses will constitute all the sellers and buyers of dresses.
In other words, a market is a set up where two or more parties engaged in exchange of goods, services and information.
For the market to be competitive, there has to be more than one buyer and seller.
Market \(=\) Shops for one commodity or a set of commodities
A market for clothes, a market for vegetables.
Features of market:
1. A market is not restricted to one physical or geographical location. It covers a wide range of area, and the demand and supply forces of the region.
2. For the market to exist, there must be a group of buyers and sellers of the commodity. And the relations between these sellers and buyers must be business relations.
3. The awareness about the demand for products, consumer choices, and preferences must be known to both the sellers and buyers. Buyers and sellers must possess a basic knowledge about the market.
4. For the perfect competition to exist in the market, there must be only one price to be prevalent in the market for the goods and services.