Define Market in Economics – Characteristics | New Topic [2024]

In this note, we are going to learn about the Market in Economics and the Characteristics of Market in Economics. Welcome to Poly Notes Hub, a one stop solution for Diploma Engineering Notes for Polytechnic Students.

Author Name: Arun Paul.

What is Market in Economics?

In economics, a market is a system or arrangement in which buyers and sellers trade commodities, services, or resources. It’s a broad term that includes both physical sites (like a farmer’s market or a stock exchange floor) and virtual platforms (like online marketplaces or electronic trading systems).

Some Examples of Market:

• Stock Market
• Labor Market
• Real Estate Market
• Foreign Exchange Market
• Commodity Market
• Online Retail Market
• Art Market
• Bond Market

Characteristics of Market in Economics

The key Qualities or Characteristics of a market in economics include:

1. Buyers and Sellers: Markets include both individuals or businesses looking to buy products or services (buyers) and those offering goods or services for sale (sellers). These players make trades depending on their preferences, needs, and incentives.
2. Exchange Mechanism: Markets enable buyers and sellers to meet and conduct business. This transaction can take place through a variety of channels, including face-to-face talks, auctions, and technological platforms.
3. Prices: Prices play an important role in markets, acting as signals that convey information about the relative scarcity of products or services. The market’s supply and demand factors interplay to determine prices.
4. Competition: Markets often feature seller competition, which can lead to increased production and resource allocation efficiency. As businesses compete for clients, they tend to offer higher-quality goods or services at lower prices.
5. Market Structures: Market structures vary depending on the number of consumers and sellers, the degree of product differentiation, and the ease of entry and exit. Common market structures include perfect competition, monopolistic competition, oligopoly, and monopoly.