The meaning of market in economics

The meaning of market in economics
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Published Date:25-07-2017
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Section C General Economics Chapter 4 Unit 1 Ms.Prem J.Bhutani The meaning of market in economics Classification of market Types of market structure Concept of Total, Average and Marginal Cost Behavioral principles in Market Market means • The place where buyers and sellers meet • Transfer of goods or services • Price plays an important role Buyers and sellers A product or service Bargaining for a price Knowledge about market conditions One price for a product or service at a given time The classification is based on • Area • Time • Nature of transaction • Regulation • Volume of business • Position of sellers • Types of Competitions Local Regional National International Local Markets: • Markets for perishable like butter, eggs, milk, vegetables, etc • The transport of these over a long distance will be uneconomic Regional Markets: • Semi-durable goods command a regional market National Markets: • In this market durable goods and industrial items exist International markets: • The precious commodities like gold, silver etc. are traded in the international market Very short period market Short-period market Long period market Very long period or Secular period Alfred Marshall conceived the ‘Time’ elements Very short period market: • It refers to that type of market in which the commodities are perishable • Supply of commodities cannot be changed at all • In a very short-period market, the market supply is almost fixed • Commodities like vegetables, flower, fish, eggs, fruits, milk, etc Short-period Market: • It refers to that type of market in which commodities are durable and also reproducible • The supply of the commodity can be altered • The plant and machinery remains unchanged Long-period Market: • It implies that the time available is adequate • Changing the supplies by changing even the fixed factors of production • The supply of commodities is increased • New plant or machinery and the output adjustments can be made accordingly Very long-period or secular period : • The secular movements are recorded in certain factors over a period of time • The period is too long • The factors include the size of the population, capital supply, supply of raw materials etc Spot Market: • Spot transaction or spot markets • The markets where goods are physically transacted on the spot Future Market: • It is related to those transactions which involve contracts of the future date Regulated Market Unregulated Market Regulated Market: • The transactions are statutorily regulated • No unfair practices. • Eg. Produce and stock exchange Unregulated Market: • It is also called as free markets • There are no restrictions in the transactions Wholesale Market Retail Market Wholesale Market: • The commodities are bought and sold in bulk • large quantities Retail Market: • The commodities are sold in the small quantities • This is the market for ultimate consumers Whole Market Retail Market Primary Market: • Manufactures of commodities who sells the product to the wholesalers Secondary Market: • Wholesalers who sell the products in bulk to the retailers Terminal Market: Retailers sell the products to the ultimate consumers Perfect competition Monopoly Monopolistic competition Oligopoly

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