Market means a place where people gather to carry out transaction and exchange something for value. Market is an essential part of any economy and provides the sellers and buyers a meeting place to facilitate exchange. Different experts have defined market as follows:
According to Jevons, “The word market has been generalised so as to mean any body of persons who are in intimate business relations and carry on extensive transactions in any commodity.”
In the words of Benham”, Market is an area over which buyers and sellers are in close touch with one another, either directly or through dealers, that the price obtainable in one part of the market affects the prices paid in other parts.”
Market is also described as an organisation whereby buyers and sellers of goods are kept in close touch with each other.
Volume of Business
Market is classified on the basis of volume of business as wholesale and retail markets. In the wholesale market quantities exchanged are large and in bulk while in retail they are exchanged in smaller lots.
On the basis of time, markets are divided as very short period markets, short period markets and long period markets. Very short period markets are for commodities which are perishable and here, supply is fixed. In short period markets, supply can be increased but to a limited extent and in long period markets supply can be increased to any extent.
According to status of sellers, markets are classified as primary, secondary and terminal markets. Manufacturers are part of primary markets, wholesalers constitute secondary market and retailers form part of terminal market.
Nature of Transactions
One can classify the market on the basis of nature of transactions as spot market and future market.
When the government stipulates certain regulations on the transactions then such a market is called regulated market and when transactions are left to the market forces then such a market is called unregulated market.
According to market structure, markets are of the following types:
a) Pure or Perfect Competition
c) Monopolistic Competition
d) Duopoly, Oligopoly