By Crystal Cristin

"Decoding Markets: Features That Define and Classifications That Matter"

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Market: It is the mechanism where buyers and sellers are brought together inorder to exchange goods and services directly or indirectly.

Features of market:

  • Commodity: There must be commodity in market which is being demanded or sold. There are certain criteria that a commodity must possess to be fit for trading.
  • Buyers and seller: To create a market for a commodity what we need is only a group of potential seller potential buyers. They must be present in market of course.
  • Areas: In economics, market doesnot refer only to a fixed location.It refers to the whole area or region of operation of demand and supply.

1. Basis on area:

  • local market: It covers small area.
  • regional market: It covers wider area than local market.
  • national market: It covers areas within the country.
  • international market: It covers the widest area like country to country.

2. Basis on volume of transation:

  • wholeseller market: It is a business in which goods are sold in large quantities to retailers, industries and other business.
  • retailer market: It is a business when the goods are sold to final consumer in small quantities.

3. Basis of competition:

  • Perfect competition 
  • Imperfect competition

EXPLAINTION OF TYPES OF MARKET ON THE BASIS OF COMPETITION:

1.Perfect competition: It is the market structure where there are a large number of buyer and seller with homogeneous products selling at a uniform price. 

Its features:

  • It is price taker.
  • There will be no transportation cost.
  • There are a large number of buyer and seller.
  • Every firm is free to join or leave industry.
  • It has homogeneous products.

2.Imperfect competition: It is the market structure between perfect competition and monopoly which consists of at least, two sellers and sellers have control over price of their products.

Its types:

  • Monopoly market: It is the market structure where there is a single seller of a product having no close substitute.
  • Monopolistic market: It refers to market structure which there are many seller producing differential products.
  • Oligopoly market: It refers to market structure where there a few seller and these few seller have large market share.
  • Duopoly market: It refers to the market which have two producers on the market. For eg: coke, pepsi etc.
  • Monoposony market: It is the market structure in which a single buyer substantially controls the market as major purchase of goods and services offered by many would-be seller.