A market is a mechanism or place where buyers and sellers interact to exchange goods and services. This interaction determines the price and quantity of goods and services that are bought and sold.
Markets can exist in various forms, including:
Physical Markets: These are traditional locations where buyers and sellers meet, such as farmers' markets or shopping streets.
Virtual Markets: These are online platforms where transactions occur, such as e-commerce websites (e.g., Amazon) or online auction sites (e.g., eBay).
Key characteristics of a market include:
Buyers: Individuals or businesses who want to purchase goods and services.
Sellers: Individuals or businesses who want to offer goods and services for sale.
Goods and Services: The items being exchanged.
Price: The value at which goods and services are exchanged.
Information: Data about prices, availability, and quality that helps buyers and sellers make decisions.
Characteristic
Description
Buyers
Individuals or businesses who purchase goods and services.
Sellers
Individuals or businesses who offer goods and services for sale.
Goods and Services
The items being exchanged.
Price
The amount of money exchanged for goods and services.
Information
Data about prices, availability, and quality.
The interaction of supply and demand within a market is a fundamental concept in economics, determining the equilibrium price and quantity.
Suggested diagram: A simple supply and demand curve illustrating the interaction between buyers and sellers to determine market equilibrium.