In the ordinary language, market refers to a place where goods are bought and sold. Thus Koyambedu market in Chennai refers to a place where vegetables are sold. In economics, market does not refer to any particular place in which goods are bought and sold. But it refers to buying and selling of a commodity. In a market a commodity is bought and sold under given conditions and there will be a number of buyers and sellers who will be in close touch with each other. For example, a fish market refers to buying and selling of fish; here both buyers and sellers are in close contact. According to Benham, 'Market is any area over which the buyers and sellers are in close touch with one another either directly or through dealers, that prices obtainable in one part of market affect the prices paid in other parts'.
Generally speaking, when we talk of markets, we refer to commodities that are bought and sold. But there are markets for things other than commodities. Thus there are labour markets, foreign exchange market, capital market and so on. For example, we may say the market for an actor, say 'X', is dull. So there may be a market for anything which has a price.
Classification of Markets : Markets may be classified according to space, time and the nature of competition. According to space, markets are classified into local market (eg. vegetables, flowers), national market (e.g. sarees) and international market (e.g steel, cotton, sugar, tea).
Markets can also be classified according to the type of competition. Thus, broadly we have perfect markets and imperfect markets.
Markets can also be classified into short period markets and long period markets according to time. If the period is short, demand plays an important role in the market and if the period is longer, supply plays an important role. Thus markets can be classified according to space, time and the nature of competition that prevails.
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