Markets: A Market which can be defined as a total number of buyers and sellers in the region or area covered by the attention. The reason or area may include earth, states, country, or cities.
The value of the items and cost or price is traded by people mainly depends on supply and demands in the markets. The nature of different markets can be a physical body or might be virtual, it may also be a global market or local market, perfect market, and imperfect market.
As we have different types of markets and all the different markets are not the same and similar. We can divide the market types based on different nature and competition level.
Different types of market structure will decide an economy. These kinds of market structures necessarily refer to the degree of competition in a market. Other components of market structures are the nature of product & services, a number of the seller, numbers of consumers, economics scale (types of market in economics).
Let us discuss different types of markets in detail. Other things to know that not all types of market present but many of them just known, they help us understand the main purpose of market structure classification.
Here are the 5 Different Types of the Market Structures
#1. Perfect competition
When we talk about the perfect competition market it means that there is a massive number of buyers and sellers. When it comes to competition all the sellers in the market are smaller in competition with each other. In these types of the market no big player to influence the market.
So each and every firm in this market are price takers. When we talk about the perfect competition market few things come in mind. This is one of the reasons it is a theoretical concept. The things can be as follow
- All the product in this market are completely identical
- Every firm and seller has only one motto of maximum profit.
- In this market, anyone can enter and exit at any time
- Here no one cares for customer perfection
#2. Monopolistic Competition
This type of market is more practical which happens in the real world. When we talk about the monopolistic competition a large number of buyers and sellers exist here. But they do not sell the same product. Actually, all the product in this market types is a similar but slightly different type of product.
Now here it comes the point of customer perfection because buyers can go for one over the other product. But the seller can charge an extra amount for the product because they have market power. Now at some point, the seller becomes the price setter. For instance, we can take an example of toothpaste for Monopolistic Competition.
In this type of market, there are only a few numbers of firm or seller but the customer are much larger than those firms. So here the seller has the market influence they set the price of the product in this case the customer becomes the price taker. Also, the firm collaborates with each other to compete with others. While the seller sets the price of the product they maximize their profit. In this kind of market, it is more difficult to enter because the new firm finds itself quite difficult to establish.
For example, we can say the cellular industry as an Oligopoly market, because there is a limited provider which is actually, price setter, and consumers don’t have many options to choose from.
When we talk about the monopoly competition there is only one seller/firm, so the single seller controls the whole market and sets the price according to their need because it has the power of the market. In this case, buyers do not have any other choice so they have to pay the price set by the seller. So, in this competitive market customers do not have power and the market forces become irrelevant. Actually, this type of market is rare in the real world.
For example, we can take Google which is a leader in the search market types, and Facebook that plays a vital role in the social media space.
As compared to another competitive market this type of market does not have a large number of buyers and sellers. Here is the only buyer to particular products and services. So, the customer has all the power to set the price of those particular products and services. Here consumer becomes the price setter and the firm becomes the price taker.
There are Mainly two Types of Market Namely Economic Markets and Physical Markets.
- Economic Markets: some of the famous types of markets in economics included in these areas – Financial Market, Media market, Foreign exchange market, Stock market, Real estate marketing (types of marketing for real estate business), agriculture marketing (different types of marketing for agriculture ), Niche market, Energy market, etc.
- Physical Markets: Example of this kind of market can include these – Bazaar, Fish market, Grocery market, Market town, Street market, Supermarket, Public market, Farmer’s market, etc.
Different Nature and Types of Market
- Available Market: It is a kind of market where all the people in that area can easily get the goods within the available market. Mostly daily use products and services sold in this type of market because transportation can be costly for these products.
- Market Minimum: This type of market is small in size where people can buy goods or products without much marketing efforts (types of marketing efforts). From this type of market, the lowest sales company can get without taking any action. Today this type of market is getting even lower.
- Market Potential: It is the type of maximum market size where people can buy goods or products is subject to great marketing (types of marketing options) action can a company take. The upper limit for sales and marketplace within the market potential.
Types of Market-Based on Geo Location
- Local Market: This type of market is located in a small area like a small town or in a village. People can buy and sell their daily needs goods here. Transportation of this type of product can be costly.
- Regional Markets: This kind of market types cover a wide range of area which can be district, cities, and It is a bigger market than comparing to the local market.
- National Markets: This types of market cover the whole country and allow to transported goods anywhere in the county as per requirement and prevent the goods to be transported outside the boundaries of the country.
- International Market: when it comes to the international market goods and services can be traded internationally and transported to the outside of the country. Here the demand can be in bulk so that it can be transported.
Different Types of Market-based on Time
- Very Short Period Market: Here the price of the product depends on the demand. If demand is high the price will be high and the demand is the low price will be less. i.e. Vegetable market and flower market.
- Short Period Market: This is for a longer period than the very short period market, where demand can be adjusted and the price can also be modified.
- Long Period Market: This types of market product supply can be changed based on the market So, it depends on the market demand and changes the production as per need. The price of the product can be different in different time periods because the price is set according to demand and supply.
Market-Based on Types of Transaction
- Spot Market: It is also called the cash market because here the product charges are being paid in cash at the time of product delivery. So, here the credit system is not available.
- Future Market: This is the type of market where the credit system works. So, people are being promised to be paid in the future. It is called the future market.
Some of the Famous Markets in Details
Foreign Exchange Market:
It is a global market that trades the currency value in a different mode. where things like buying, selling, and exchanging of different currencies at the current valuation or price. this enables people to exchange their money with ease of exchange facility.
It is also known as the share market or equity market. It is the types of markets where people buy and sell the share and stock which let them claim on business as a shareholder. Stock markets may include securities funds and some private funds too. Stock exchange market list shares of common equity and other securities too.
Financial markets are the market types of the market where people trade financial securities as well as commodities, and at low value or prices which depends on supply and demand chain. This types of the market include physical location and an electronics system as well. The term financial markets often used to refer raise in finance.
The media market is also known as the newscast market, media field, labeled market area, and TV marketing area. Here people are being offered similar television or radio station. It also includes different types of offers like newspapers and online content.
It generally covers the services used to transport or moving agriculture products from farm to consumer. It is also a well-organized system to manage harvesting, grading, packing, storage, transport, food processing, distribution, and sale.
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