Every commodity or service that is exchanged has two sides: the supply side and the demand side. Hence the study of market and market structure forms an important feature of micro economics. This chapter explains the types of markets and how price and output are determined under perfect competition, monopoly, monopolistic competition, duopoly and oligopoly.
1. Meaning of Market
- In the ordinary sense, 'market' refers to a physical place where commodities and services are bought and sold.
- In Economics, 'market' refers to a system of exchange between the buyers and the sellers of a commodity. Besides direct exchanges, exchanges are also carried out through correspondence, telephones, online, email etc.
Characteristic Features of a Market
- Buyers and sellers of a commodity or a service
- A commodity to be bought and sold
- Price agreeable to buyer and seller
- Direct or indirect exchange