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Classification of Market

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  • On the basis of place
  • On the basis of Time
  • On the Basis of Competition

notes

Classification of Market :

I) On the basis of place :
1) Local market :
Local market is a market in which sellers sell and customers buy a product in the region or area in which it is produced.
2) National market :
National market is a domestic market in a given country. Each national market is governed by the regulation of its own country.
3) International market :
International market is a worldwide market in which buyers and sellers trade in goods and services across the national borders.

II) On the basis of time : 
1) Very short period :
Very short period is a period in which supply is fixed and price is determined by the demand. The time period is for a few days or weeks in which the supply of commodity cannot be increased. 
2) Short period :
Short period is a period of less than one year. In this period, firms can only make adjustments in inputs like labour to increase the supply of goods and services.
3) Long period :
Long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs. It is for a few years, generally up to five years. 
4) Very long period :
Very long period is a production time that is so long that all inputs are variable. It is of more than five years.

III) On the basis of Competition :
Competition among the sellers and buyers is the most important criteria for classification of markets in economics. 
Perfect Competition, Imperfect Competition, Oligopoly, Monopolistic Competition are the types of Competitons.

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