MARKET

Index Definition. Features of Market. Factors Affecting the Size and Extent of Market. Classification of Market.

Definition Prof Stonier and Prof Hague:- Generally market is the place where buyers and sellers are physically present and finalize the transaction. Prof Stonier and Prof Hague:- By a market economist mean any organization whereby buyers and sellers of a goods are kept in close touch with each other.

Features of Market One Area:- Denote to a area or a region in which no of buyers and sellers are scattered. They are connected with one another via brokers, agents, letters. Etc. Buyers and Sellers:- Buyers and Sellers are must for market. In Transaction Physical Presence is not necessary. One Commodity:- For the existence of a market there should be at least one commodity like Wheat, vegetables, etc and the market is termed as wheat market, vegetables market and so on. CONT…

CONT… Perfect Competition:- Acc to Prof. Coornot, market must posses the characteristic of perfect competition where in buyers and sellers are free to enter in the market. One Price:- In Perfect competition between buyers and sellers. The market area should have one price only.

Factors Affecting the Size and Extent of Market. The Size and extent of market is affected by the following factors:- 1. Characterics of commodity:- Nature of Demand Durability Portability Cognigability Sampling and grading of goods. Adequate Supply Substitutes. Multi Uses.

Classification of Market Area 1. Local 2. Regional 3.National 4.International Time 1. Very Short 2. Short 3. Long 4. Very long Competition 1.Perfect 2. Imperfect Function 1.Mixed 2.Specialized 3.Sample 4.Grading Commodity 1.Product 2.Stock 3.Bullion Legality 1. Legal 2. Illegal

On the basis of Area/Region. Local Market- When buyers and sellers are limited to an area or region then the market is called local market. Regional Market- When buyers and sellers are concentrated to a certain region/area. The area is wide then the local market. National Market- When the demand of a commodity is limited the boundary of the country.Eg. Market of Gandhi cap , Nehru Cap. International Market- When the demand of a commodity crosses the boundary of a country.

On the basis of Time Element Very Short- Supply of a Good is limited. Cannot increase the supply. Demand determines the price of such commodities. Short Period- Production can be increased. Demand plays an important role in price determination. Long Period- Supply can be adjusted to the quantity demanded. Supply plays an imp role in price deter. Also called Normal Price. Very long- Both demand and supply can be changed. Demand Inc with the inc in tastes, habits, fashion etc. and Supply inc with the inc in variable inputs.

Market based on competition Perfect Market- Where there is Homogeneous products. Free Entry and exit from market of a firm. Perfect knowledge of market condition, and perfect mobility of factors of production. Imperfect- Where perfect competition is not in existence. Number of buyers and sellers are small. No perfect Knowledge of market conditions. There is no single price in this market.

On the basis of Functions Mixed/General market- Where all types of good are bought and sold. Found in cities. Specialized market- Where particular commodity is sold, e.g. vegetables, food grains cloths etc. Marketing by Samples- When goods are bought and sold on the basis of samples. E.g. Oil seeds, raw cotton. Marketing by grades- When the goods are graded then different buyers and sellers deal in such goods on the basis of their grades.

On the basis of nature of comodity Product Market- Where particular product is bought and sold. E.g. Agri product sold in agri market (krishi Mandi). Stock Market- Market where stock and shares, bond, securities debentures etc are bought and sold. Bullion Market- Market where Silver and Gold are bought and sold. In this market metallic trading takes place.

Market based on legality Legal Market- Where legal Transactions of goods and services take place. Recognized by the Govt. Also called fair market. Illegal market- Where high prices are charged what have been fixed by the Govt. Happens when supply is short. Business earn profits by indulging in Black Marketing, Smuggling. Hongkong market is an illigal market.

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