What is market? Explain the characteristics of market. (2024)

Meaning of market: Market may be defined as an arrangement of establishing effective relationship between buyers and sellers of the commodity.

The essential characteristics of a market are:

1. An Area: In economics, a market does not mean a particular place but the whole region where sellers and buyers of a product ate spread. Modern modes of communication and transport have made the market area for a product very wide.
2. One Commodity: In economics, a market is not related to a place but to a particular product. Hence, there are separate markets for various commodities. For example, there are separate markets for clothes, grains, jewellery, etc.
3. Buyers and Sellers: The presence of buyers and sellers is necessary for the sale and purchase of a product in the market. In the modem age, the presence of buyers and sellers is not necessary in the market because they can do transactions of goods through letters, telephones, business representatives, internet, etc.
   
4. Free Competition: There should be free competition among buyers and sellers in the market. This competition is in relation to the price determination of a product among buyers and sellers.
5. One Price: The price of a product is the same in the market because of free competition among buyers and sellers.