Definition Of Market In Economics
The determination of prices of commodities depends upon the type of market structure in which they are produced. There are various markets prevailing in an economy like (a) perfect competition, (b)Monopoly,(c) Monopolistic Competition, and (d) Oligopoly. Monopoly, monopolistic competition and oligopoly are generally grouped under imperfect competition, since these three markets differ in respect to the degree of imperfections in the market.
Before explaining all these markets in detail, it will be quite important to understand the meaning of the term market in economics.
1.2 Meaning of Market
Market in general means a particular place or locality where goods are sold and purchased. However, in economics the word market does not mean any particular
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Buyers and sellers should have close contact with each other.
4. Every commodity should have a price. The exchange of products between buyers and sellers happens at a particular price which is equally agreeable to both the buyers and sellers.
1.5 The essentials of a market
1. A product to deal with.
2. The presence of purchasers and dealers.
3.It might be a specific place, a district or the entire nation or the whole world. 4. It facilitates for free interaction between sellers and buyers.
1.6 Forms of Market
The different forms of market are discussed below in detail.
1.6.1Perfect Competition
Perfect Competition is a Market Structure that characterize boundless contestability (No barriers to enter) and boundless number of producers and consumers, and a Perfectly Elastic Demand Curve. Perfect competition is a market structure where an unending extensive number of buyers and sellers work freely and sell a homogeneous commodity at a uniform price. Features of Perfect Competition
1. Large number of Buyers and Sellers: The industry or market incorporates a substantial a large number of firms (and buyers) so that every individual firm, however extensive offers only a little part of the total quantity offered in the market. The buyers are likewise various so that no monopolistic power can influence the working of the market. Under these circumstances each firm alone cannot influence the price in the market by altering its
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