Market- Definition, Features & Factors
Meaning and Definition
In ordinary language “market” means a particular where buyers and sellers gather together and make bargains. In Hindustani, we call it a “Mandi” but in economics, by the term “market” we do not mean a place. In economics, this term is used in a wider sense.
The French Economics, Cournot has defined it in the following words; “Economics its understand by the term market in the following words;’ Economists understand by the term market not any particular place in which things are bought and old, but the whole of any region in which buyers and sellers are in such free intercourse with one another, that he prices of the same goods tend to equality easily and quickly.”
Chapman has defined it in the following words: “The term market refers, not necessarily to a place, but always to commodities and buyers and sellers of the same who are in direct completion with one another.”
Jevons has expressed the following view regarding the term market persons who are in intimate business relations and carry on extensive transaction in any commodity.”
From the above definitions, it will be evident that a markets may be a place or region where buyers and sellers are in a state of free, competition with one another. These buyers and sellers may not be at one place.
Essential Features of a Market-
Given below are the essential features of a market;
- A commodity;
- An area or a region which may be a city, a village a country or the whole world
- Competition among buyers and sellers; and
- Existence of a number of buyers and sellers.
In the case of perfect competition among buyers and sellers, who deal only in a particular commodity, there can be, at any given time, only one price for that particular commodity. The existence of a single competitive price is an essential feature and a sure test of a competitive market.
Factors which Determine the Size of a Market-
The following factors determine the size of markets for various commodities:
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Extent of Demand:
A widespread demand is necessary for commodity is necessary for commodity in order to command and wide market. If a commodity has a larger number of buyers spread over a wide area, such a commodity is likely to have wide market a vice versa. For instance, sugar has a worldwide market, because it has a wide demand all over world.
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Extent of Supply:
Commodities having adequate supply to meet a wide demand have wide markets. For instance, rare works of art do not have wide markets, because their supply is extremely limited.
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Durability:
There is always a wide market for durable commodities perishable commodities like meat, green vegetables, and milk, which cannot be carried over long distance, nor can they stand the strain of transport do not have wide markets.
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Portability:
A portable commodity commands a wide market. This is because it can be transported from one place to another without much difficulty and incurring great costs.
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Cognizability:
By cognizability we mean the suitability of a commodity for being correctly described by sampling etc. Commodity which can be correctly sample or graded, other things being equal, command a wide market.
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Means of Transport and Communication:
Well developed and efficient means of transport and communication makes it easy to carry the goods over long distance. This helps in the extension of market and bringing down the price.
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Peace and Security:
Peace and security are very essential for a wide market. In times of war and disturbances the traders do not like to send goods over long distances for rear of their being lost or preferred in transit.
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Free Trade:
Free Trade kin essential for enlargement of market Hindrances in free trade, viz, quotas, exchange control, tariffs, etc. tend limit the extent of market.
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Salesmanship and Advertisement:
These day propaganda and advertisement goes a long way in bringing about the extension of markets of various commodities
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Efficient currency and Banking system:
Stable and efficient currency system and satisfactory banking facilities are most essential for the growth of market.
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Package and Storage Facilities:
With the help of proper packing and scientific devises, I like cold storage etc.; it has been possible to make available wide’ market for punishable and fragile commodities.
Important links
- Law of Diminishing Returns- Definition, Causes, Limitation etc.
- Law of Variable Proportions- Assumption, Explanation, Stages etc.
- Cost Curve: Nature, Relationship between LMC & SMC
- Importance of the Law of Diminishing Marginal Utility
- Elasticity of Demand- Definition, Degree, Measurement
- Price Elasticity- Factors & Importance
- Consumer Surplus- Definition, Measurement & Importance
- Production Function- Meaning, Explanation, Features, Types
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