In ordinary sense, a market is a place where things are bought and sold. But in economic sense, a market is a place or region, where buyers and sellers have free competition with one another. The buyers and sellers may not be at one place. They may have free intercourses by means of post, telegraphs, telephones etc. Therefore, in the economic sense, the term market is applied to commodities and buyers and sellers or the same who are in direct competition with one market to another.

Essentials of Market: The following are the essentials of a market,

1. A commodity.

2. The large number of buyers and sellers.

3. An area or region which may be a village, a city, a country, or the whole world.

4. Competition between buyers and sellers.

When there is a perfect competition between buyers and sellers, there can be only one price for the commodity at any given time. Some allowance may be made for cost of transportation from one part of the market to another.


Classification of Markets

Markets may be classified in respect of (a) space (b) time.

Under space, we may have,

1. Local market

2. National market

3. International market

Under time, we may have,

1. Short period market

2. Moderately long period market

3. Long period market

4. Secular market or long period market

Space Market

When commodity is brought and sold only within or near its place of production, it has local market e.g. fresh vegetables, milk etc.

When the area of the market covers a whole country, the whole commodity is said to have National Market.

When competition in the case of a commodity is world-wide the market is said to be international.

Time Market

This division of market refers to the period for which the market for any commodity exists.

Next Chapters

Estimating Procedure
Difference between Estimating & Costing
Depreciation & Obsolescence
Material Cost Calculation
Calculating Labor Cost
Direct and Indirect Expenses
Component Cost
Machine Shop Estimating
Forging and Forging Types
Starting an Organization
Welding Cost Estimation
Jigs and Fixtures
Qualities of an Entrepreneur
Starting Small Scale Industries
Budget and Budgetary Control
Supply & Law of Supply
Exchange and Barter Exchange
Classification of Market
Money and Types of Money
Trade Cycle
Break Even Analysis
Financial Management

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