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Topic: Market Structure
Lesson Objectives: by the end of the lesson the learners should be able to;
1. Define the term market;
2. State the types of markets according to their respective classes;
3. State the conditions necessary for a perfect and imperfect market.
MARKET STRUCTURESA market is a point of contact, place or any means of communication whereby sellers and buyers can communicate with one another, to exchange goods and services at prices determined by the market forces.
Types of MarketsMarkets can be grouped on the basis of the type of commodities purchased and sold or on the basis of the channel of movement of finished products from the producers to consumers, or on the basis of prices.
(A) Types Of Market According To Commodities Sold In Them
i. Money market: Money market is the type of market for short term loan. It consists of institutions or individuals who either have money to lend or wish to borrow on a short term basis.
ii. Capital market: Capital market is a market for medium-term and long-term loans. It serves the needs of industries and the commercial sector. It comprises all institutions which are concerned with either the supply of or demand for long term loan.
iii. Consumer goods market: Consumer goods market is the type in which finished products ready for use by consumers are sold and bought.
iv. Primary products market: This is the type of market in which primary products in their raw forms are sold and bought.
v. Factor market: This is the type of market in which the factors of production are sold and bought.
vi. Foreign exchange market: This is a market which deals with foreign exchange transactions and it involves the buying and selling of foreign currencies.
vii. Labour market: Labour market is the type in which workers and employers are in close contact for the purpose of rendering services.
viii. Stock exchange market: This is a market where investors can buy and sell existing securities like shares, stocks, debentures, etc. This is a market where those who are interested in the purchase of securities are brought into contact with the sellers.
(B) Types Of Market According To Channel Of Distribution
i. Wholesale market: This is the type of market in which a trader called wholesaler buys commodities in large quantities from the manufacturer and sells in small quantities to the retailer.
ii. Retail market: This is the type of market in which a trader known as a retailer buys commodities from the wholesaler and sells in bits to the final consumers.
(c) Types Of Market According To Prices: The types of market based on the prices of commodities are grouped into two: perfect and imperfect market.
Done studying? See previous lessons in economics
- Define market.
- What are the types of market?
- What are the conditions necessary for a perfect market?
- State the conditions necessary for an imperfect market?