Definition and classification of Market
Market is a place where goods and services are exchanged. Markets consist of buyers and sellers with facilities to communicate with each other for transactions of goods and service.
Or, Any arrangements whereby buyers and sellers interact to determine the price and quantity of a commodity.
Essential of a market:
A. A commodity which is dealt with.
B. The existence of buyers and seller.
C. A place such as certain region, A country or the entire world.
D. Such intercourse between buyers and sellers that only one price should prevail for the same commodity at same time.
Classification of market:
A. On the basis of number of commodities:
(I) General market: In general market all types of commodities are sell.
(II) Specialized market: Specialized market deals with a specific commodity. E.g. Vegetable market, Jute market, Rice market, Fish market etc.
B. On the basis of market area:
(I) Local market: e.g. Vegetable market, Saheb bazar, Nawdapara bazar etc.
(II) Regional market: Regional market covers 4 to 5 districts. E.g. Food grain market, Fruit market etc.
(III) National market: e.g. Jute market, Tea market etc.
(IV) International market: e.g. Gold, Diamond, Coffee market etc.
C. On the basis of location:
(I) Village market: e.g. Nawdapara bazar.
(II) Primary whole sell market: Transaction take place between producer and traders.
(III) Secondary whole sell market: This market is found in the districts area quarters. Whole sellers and village traders are main participant in this market.
(IV) Terminal market: It is located in the big city and it is organized market. Whole sellers and agents are found in this market.
(V) Sea boat market
D. On the basis of time:
(I) Short period market: e.g. Vegetable market, Fish market etc.
(II) Long period market: e.g. Food grain market, Oil seed market etc.
(III) Secular market: These are permanent market. All kinds of commodities are found. E.g. R.D market.
E. On the basis of volume of businesses:
(I) Whole sell market
(II) Retail market
F. On the basis of competition:
(I) Perfect/Pure competition market:
A market is said to perfect when all the potentials sellers and buyers are prominently awards of the prices at which transaction 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 at same time is the essential characteristic of a perfect matket.
The condition of pure competition market:
a. Large number buyers and sellers.
b. Homogeneous product.
c. Free entry and exit.
d. Absence of transport cost.
(ii) Imperfect market:
A market is said to be imperfect when some buyers and sellers or both are not aware of that offers being made by others. Naturally, therefore, different prices come to be prevails for the same commodity at same time in imperfect market.
Imperfect market take 3 main form:
I. Monopolistic competition:
a. The number of dealer is not large.
b. The product are not homogeneous.
c. The same price does not rule in the market throughout.
d. The demand for the product is not perfectly elastic.
There are only a few sellers in a Oligopoly market.
iii. Monopoly market:
When there is a monopoly, A single producers or sellers control the entire market. Therefore no substitute for the product. He control the entire supply and he can fixed the price.
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