Definition and classification of market are given below.
Definition of market:
A market is a place for exchanging goods and services. Markets consist of buyers and sellers with facilities to communicate with each other for transactions of goods and services.
Alternatively, Any arrangements whereby buyers and sellers interact to determine the price and quantity of a commodity.
Essential of a market:
- A commodity that is dealt with.
- The existence of buyers and sellers.
- A place such as a specific region, A country, or the entire world.
- Such intercourse between buyers and sellers that only one price should prevail for the same commodity simultaneously.
Classification of market:
A. Based on the number of commodities:
- General market: In the general market, all types of commodities are sell.
- Specialized market: Specialized market deals with a specific commodity. E.g., Vegetable market, Jute market, Rice market, Fishmarket.
B. Based on market area:
- Local market: e.g., Vegetable market, Saheb Bazar, Nawdapara Bazar.
- Regional market: Regional market covers 4 to 5 districts. E.g., Foodgrain market, Fruit market, etc.
- National market: e.g., Jute market, Tea market, etc.
- International market: e.g., Gold, Diamond, Coffee market, etc.
C. Based on the location:
- Village market: e.g. Nawdapara bazar.
- Primary whole sell market: Transaction takes place between producer and traders.
- Secondary whole sell market: This market is found in the district’s area quarters. Whole sellers and village traders are the main participants in this market.
- Terminal market: It is located in a big city, an organized market. Whole sellers and agents are found in this market.
- Sea boat market
D. Based on time:
- Short period market: e.g., Vegetable market, Fish market, etc.
- Long-period market: e.g., Foodgrain market, Oilseed market, etc.
- Secular market: These are the permanent market. All kinds of commodities are found. E.g., R.D market.
E. Based on the volume of businesses:
- Whole sell market
- Retail market
F. based on the competition:
1. Perfect/Pure competition market:
A market is said to perfect when all the potentials sellers and buyers are prominently awarded the prices at which transactions take place and all the offers made by other sellers and buyers, and when any buyers can purchase from any sellers. The prevalence of the same price for the same product simultaneously is the essential characteristic of a perfect market. The condition of pure competition market:
- A large number of buyers and sellers.
- Homogeneous product.
- Free entry and exit.
- Absence of transport cost.
2. Imperfect market:
A market is said to be imperfect when some buyers and sellers or both are not aware of the offers being made by others. Naturally, therefore, different prices come to prevail for the same commodity simultaneously in an imperfect market.
The imperfect market takes 3 main forms:
I. Monopolistic competition:
- The number of the dealer is not large.
- The product is not homogeneous.
- The same price does not rule in the market throughout.
- The demand for the product is not perfectly elastic.
There are only a few sellers in an Oligopoly market.
III. Monopoly market:
When there is a monopoly, single producers or sellers control the entire market. Therefore no substitute for the product. He manages the whole supply, and he can fix the price.