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In today’s Business Studies class, We will be discussing Market. We hope you enjoy the class!
“the system through which the buyers and sellers get in contact with each other directly or indirectly for the sale or purchase of goods or services is called a market.”
Meaning of market:
Generally, the place where there is a purchase and sale of commodities and services take place is called a market. The concept regarding the market in economics more extensive and wider than the prevailing idea.
Characteristics or elements of a market:
The market has its own particular characteristics as follows:
1. Numerous sellers and buyers:
Lt is mandatory to have buyers and sellers of goods and services in a market. The purposeful exchange of goods and services made through them. This process allows the sellers to gain maximum profit and the buyers to gain satisfaction from the product or services.
2. Goods and services:
It is necessary that there are goods and services available according to demand and necessity. To gain maximum profit, the producers and sellers provide the products and services in various types and forms and try to attract the buyers towards them. While for their satisfaction the buyers try to buy an ideal set of products and services.
The buyers and sellers come in contact via various means. The contact made can be either direct or indirect. In modern time, the buyers and sellers come in contact via the indirect means.
4. One price for a product or service at a given time:
At a given time, the price of the product or service must be decided in the market. The price is decided according to the demand and the factors of supply. The price of products and services depends on the demand made by the buyers and the ability of the producers and sellers to supply them.
5. Information about the market situation:
It is important that buyers and sellers have enough information about the current market situation. So that decisions related to production, distribution and purchase can be taken during the times of recession, inflation, natural and man-made calamities.
Classification / types of market:
The market can be classified on the basis of location, time, the form of products or services, the quantity of product, control, transactions and competition. Types of market are as following:
(a) markets based on location:
1. Local market:
The market where the products and services are produced and sold at the same place, it is called a local market. For example; a market for clay utensils, a market of handmade items as they are limited to the respective city or village.
2. Regional market:
When the selling of the products and services is limited to a region or state, then is called a regional market. It means that the market is limited to a particular state which is spread in various regions of a state. For example; market of a regional newspaper.
3. National market:
When the products and services are purchased and sold throughout the country or nation, then the market is called a national market. Such type of market is spread throughout various states. For example; dairy products, sari market, English novels.
4. International market:
The international market is extended to various countries in the world. The sales and purchase in this market are generally referred to as ‘import-export’. For example; market of mobiles phones, electronics items, English novels etc. Due to new innovations, better transportation and communication facilities, there is a change in the classification based on the location and geographical area. The same items and services can be of both regional and national market simultaneously.
(b) market-based on quantity:
The market based on quantity is classified into two main parts:
1. Wholesale market:
The sales and purchase of goods and services take place on a large scale, so it is called a wholesale market. Wholesale traders are intermediate between producer and retail traders.
2. Retail market:
The sales and purchase take place at a small scale, so it is called retail market. Thus, the retail traders become an important link and provide the goods and services to the customers as they buy them from wholesalers.
(c) market-based on competition:
Normally there are two major markets based on competition:
1. Perfect competition:
Perfectly competitive market is where there are many firms that sell identical products, with no firm large enough that can influence the market price.
2. Imperfect competition:
There are three types of imperfect competitive market:
(d) market on the basis of time:
1. Very short period market:
It refers to that type of market in which the commodities are perishable (can be used/ consumed once) and supply of commodities cannot be changed at all as factors like labour, capital and organization are fixed. For example; commodities like vegetables, flowers, fish, eggs, fruits, milk, etc. Are perishable goods and the supply of which cannot be changed in the very short period.
2. Short-period market:
A short period is a period which is slightly longer than the very short period and supply can be increased by increasing employment considering the given fixed capital equipment.
3. Long-period market:
The supply of commodities may be increased by making changes to even fixed factors of production and the output adjustments can be made accordingly.
4. Very long-period or secular period:
The time period is very long and the secular change is recorded over the period in the population, supply of raw material.
We have come to the end of this class. We do hope you enjoyed the class?
Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.
In our next class, we will be talking about Careers in Capital Market. We are very much eager to meet you there.
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