Question

Explain different types of markets in detail.

Answer 1

Markets can be broadly classified into the following categories.

1. On the Basis of Area Covered
   a) Local Market: The market for the commodities which are sold within local geographical limits of a region is known as a local market.
   b) National Market: The market for the commodities which are sold within the country is
   known as the national market.
   c) International Market: The market for the commodities which are produced in one
   country and sold in other countries is known as the international market.
2. On the Basis of Time
   a) Very Short Period Market: This type of market has a very short time existence viz., for a few hours or for a day at a particular time and place. In this type of market perishable goods such as vegetables, fruits, milk products, etc. are sold.
   b) Short Period Market: This type of market has existed for a short period viz. weekly markets, festival market, market during fairs, etc. Perishable or semi-durable goods are sold in this market.
   c) Long Period Market: This type of market has existed for long period. In this type of market durable commodities that are generally non-perishable in nature are sold.
3. On the Basis of Volume of Transaction
   a) Wholesale Market: In the wholesale market, the activity of buying and selling goods is undertaken in large quantities at cheaper prices. Goods are sold to retailers who then sell them to the consumers. It refers to the market for bulk purchase and sale of goods. In such a market seller are known as wholesalers and buyers are known as retailers.
   b) Retail Market: Retail market is the market where the retailer sells goods directly to the consumer in small quantities.
4. On the Basis of Importance
   a) Primary Market: Primary Market refers to the market for primary products such as agricultural and forest products, for example, fruits, vegetables, food grains, etc.
   b) Secondary Market: Secondary Market refers to the market for semi-processed and semi-manufactured goods. For example the yarn market, iron ore market, etc.
   c) Terminal Market: Terminal Market refers to the market where goods are sold to the ultimate consumers or the users of the product.
5. On the Basis of Nature of Goods
   a) Commodity Market: Commodity market refers to the market for goods, material, or produces viz., consumer goods, and industrial goods.
   b) Capital Markets: It is a market for borrowing and lending long term capital required by business enterprises. The financial asset dealt within the capital market has a long or indefinite maturity period.
6. On the Basis of Regulation
   a) Regulated Market: Regulated market refers to the markets regulated by statutory provisions of the country. For example, Commodity Exchanges, Stock Exchanges, ForeignExchanges.
   b) Unregulated or Free Market: It refers to the markets which are not controlled by any specific regulations. It generally operates according to forces of demand and supply.
7. On the Basis of Competition
   a) Perfect Market: Perfect market is a market where a large number of buyers and sellers buy and sell their homogeneous products. These buyers and sellers have perfect knowledge about market conditions and therefore, one single price prevails in the market.
   b) Imperfect Market: Imperfect Market refers to a market situation that is characterized by market imperfection such as a single seller, maladjustment in demand and supply, imperfect knowledge on the part of buyers or sellers, etc.