A market is an environment that allows buyers and sellers to trade or exchange goods, services, and information. These interactions define demand and supply characteristics and are therefore fundamental to economies.
A market can be defined as a place where any type of trade takes place. Markets are dependent on two major participants – buyers and sellers. Buyers and sellers typically trade goods, services and/ or information. Historically, markets were physical meeting places where buyers and sellers gathered together to trade. Although physical markets are still vital, virtual marketplaces supported by IT networks such as the internet have become the largest and most liquid.
Some markets are very competitive, with a number of vendors selling the same kinds of products or services. Conversely, some markets have low or no competition, particularly if the industry is protected by government legislation.
The number of buyers and sellers involved will have a direct bearing on the price of the good or service to be sold, and has become known as the law of supply and demand. Where there are more sellers than buyers, the availability of supply will push down prices. If there are more buyers than sellers, the increased demand will push up prices.
Markets can appear spontaneously when there are goods or services to be exchanged, or they can be planned and regulated.
Free markets operate under ‘laissez-faire’ conditions, in that the government does not intervene in how the market operates. These markets may be distorted if a seller gains monopoly power by managing the majority of supply (or indeed if a buyer develops monopsony power by managing demand). Governments or trade bodies often step in when such distortions undermine the smooth functioning of free markets.
The currency markets are the largest continuously traded markets in the world. Twenty four hours a day, seven days a week, governments, banks, investors and consumers are buying and selling every currency, leading to massive money flows constantly changing hands.
Stock markets have become highly complex markets that allow investors to buy shares in companies or in funds that aggregate companies or industries together. Most stock markets today are primarily electronic networks, although they often maintain a physical location for buyers, sellers and market makers to interact directly.
Types of Consumer Markets
Markets originally started as marketplaces usually in the center of villages and towns, for the sale or barter of farm produce, clothing and tools. These kinds of street markets developed into a whole variety of consumer-oriented markets, such as specialist markets, shopping centers, supermarkets, or even virtual markets such as eBay.
With the rising price of oil and food, commodity markets are once again under the spotlight. Commodities underpin economic activity. Commodity markets include: energy (oil, gas, coal and increasingly renewable energy sources such as biodiesel), soft commodities and grains (wheat, oat, corn, rice, soya beans, coffee, cocoa, sugar, cotton, frozen orange juice, etc), meat, and financial commodities such as bonds.
Capital Goods & Industrial Markets
Capital goods markets help businesses to buy durable goods to be used in industrial and manufacturing processes. A number of services can also be associated with these goods. Transactions tend to be wholesale with large quantities of goods being transacted at low prices.
Common prevalance of market types over the world are Finance Market, Money market,Capital market etc. Find below various types of markets over the world.
Money market generally deals with short term debt securities that mature in less than a year.Find various instruments used, rates charged and functioning of world money market.
- Farmer’s Market
- Free Market
- Black Market
- Green Economy
- New Economy
- Digital Economy
- Knowledge Economy
World market can be defined as a common point where all the markets of the world converge.Get detailed on various world markets.
Share market is the market for securities where organized issuance and trading of shares takes place.Find how to invest in the share market and online share trading.
Its a type of financial market where buying and selling of bonds takes place. Bonds are issued by Governments or private companies.