Concept And Types of Markets - SS2 Economics Lesson Note
A market is a place or mechanism where buyers and sellers come together to exchange goods and services. Markets can be physical locations like a local supermarket, or they can be virtual spaces like an online shopping platform. The type of market can have a significant impact on the prices and quantities of goods and services exchanged and the level of competition among sellers. There are different types of markets, based on various factors. Here are some of the most common types of markets:
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Perfect competition market: In this type of market, there are many buyers and sellers, and no single entity can influence the price. All firms sell identical products and have equal access to resources.
Monopoly market: In this type of market, there is only one supplier or seller, which has complete control over the market. The firm can set prices as high as it wants because there are no competitors.
Oligopoly market: In this type of market, there are only a few sellers, and each one has a significant impact on the market. The firms might try to coordinate their pricing or output levels to increase profits.
Monopolistic competition market: In this type of market, there are many firms selling similar, but not identical products. Each firm has some control over its price and can differentiate its product to make it more appealing to consumers.l
Duopoly market: In this type of market, there are only two sellers who dominate the market. They may engage in price competition or collusion to increase profits.