Types Of Markets, Details and More [2024]

Types Of Markets – Hi, I hope you are doing well.

A marketplace is wherein shoppers and dealers can come organized to trade items and services. Markets may be bodily, which include a farmers market, or digital, consisting of an online market.

The impact of demand and deliver determines the charge of a commodity in a market. Supply is the quantity of a product available on the market, and demand is the quantity of a commodity people want to shop for. When supply exceeds call for, the commodity’s fee will fall. When demand exceeds deliver, the commodity’s fee will upward push.

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A market is where potential shoppers and sellers contact each other to complete a transaction and exchange goods or services at an agreed exchange rate. The market arrangement is one of the fundamental questions based on which markets are classified into different types. The market system is the controlled process that determines buyers and sellers and the mediums of exchange.

Markets can be classified into four main types based on the number of buyers and sellers present in a market structure:

1. Monopoly Is One Of The Types Of Markets

When there is a single seller against a large number of buyers in a market without sufficient substitutes or competitors, they enjoy a monopoly. It happens when a brand takes control of a particular product or product in a call, and other brands take time to catch up in terms of quality or availability, and hence buyers keep choosing that brand.

2. Monopsony

It is the monopsony scenario in a market with only one buyer but multiple sellers. Since the buyer is in control, he can set any rules to sort the lot and choose the best one. For example, when many potential employees are willing to sell their jobs and skills, an employer becomes the sole buyer to multiple sellers.

3. Oligopoly Is One Of The Types Of Markets

The Latin words olígoi, meaning “small,” and pōléō, telling “sell,” together form the word oligopoly, indicating that there are few big sellers in a market system. In some industries, only a few companies are selling distinguished. Still, similar products and buyers choose from similar products labelled differently under different brand names and sold at a slightly different price point. Still, the parent company is often the same.

For example, within the US information and media marketplace, the top six media companies (Walt Disney, Time Warner, CBS Corporation, Viacom, NBC Universal and News Corporation) very own about ninety% of the US mass media marketplace

4. Oligopson

Contrary to oligopoly, if there had been few large buyers in a market, it’d be oligopsony.

A good example would be the American food industry, where fast-food giants like McDonald’s, KFC, Wendy’s, and Burger King buy most meat produced in the United States by local ranchers. Their control overall meat production gives them the power to dictate the price of beef in general, which would be the Oligopson example for you.

There are two main classifications of markets based on their tangibility, namely:

1. Physical Markets

Markets that have a tangible existence are called physical markets. Customers or buyers can enter these markets in person, where vendors have already set up counters or stalls to sell their wares. Shopping malls, large department stores, and hypermarkets can be good examples of physical markets.

2. Virtual Markets

Markets with no physical existence other than the internet or computer screen are commonly referred to as virtual markets because they only exist in the virtual realm. They are also known as non-physical or internet markets. Online shops and e-commerce websites are good examples of virtual marketplaces.

These two main market classifications (physical and virtual) can work in the following ways:

1. Hypermarkets

The markets where finish consumer goods sale are called hypermarkets. These end products pile up on store shelves before seel to the average consumer and range from groceries to clothing to jewellery. The sellers often set the price, and the negotiation ends on their terms.

2. Industrial Markets

In this type of market, the goods or services are not sold directly to the consumer but to other businesses. Trade between companies can be in the discussion for services or goods or money. The price or discussion rate is often a point of contention and is only agreed upon when both parties are satisfied.

3. Auction Markets

Auction markets follow the auction process where the highest bidder gets the corresponding product in interactive auctions. The price remains undecided here until the end of the auction, and ultimately, the buyer decides how much he is willing to pay for the auctioned product.

4. Government Contracts

Government markets consist of government-fund institutions and entities that make purchases dictate by the government itself only after a budget has allocate and approve. It is a non-profit market because the seller does not make a tangible profit in monetary assets.

5. Institutional Markets

Institutions that provide exceptional care and services to community members and thus contribute to society are the ones that form institutional markets. They are usually finance sponsors who only come from goodwill. Schools, hospitals, nursing homes, and prisons are some of the organizations that belong to the institutional market.

6. World Market

The whiff of globalization has not escaped market systems and business expansion. The global market would be a market that extends beyond national borders. Businesses willing to transcend the nation’s boundaries in which they were born are multiplying every day. The most significant global presence brands would be Coca-Cola, Microsoft, Xiaomi, etc.

7. Black Markets Is One Of The Types Of Markets

The black market is a shadow economy in which illegal goods and services sell under the radar so that government-regulated prices can be adjust for the seller’s convenience or avoid taxes. Illegal drug deals, human trafficking, etc. They are usually only produce on the black market.

8. The Market For Intermediates Is One Of The Types Of Markets

Intermediate products are make from raw materials and then manufacture finish products. The wholesale market typically sells intermediate products needed to manufacture end-use goods or other intermediate products. This type of trade also takes place between companies.

9. Knowledge  Market  Is One Of The Types Of Markets

Data and information are amongst the most valuable goods of the 21st century, and this is precisely what the knowledge market creates. The market where data, info and knowledge are sold instead of physical goods is called the knowledge market.

10. Financial Markets Is One Of The Types Of Markets

It is the type of market where several financial assets are trade, ranging from cash to bonds, debentures etc. Since this type of market deals with the financial aspects, the market is known as financial market.

A) Money Market

Monetary assets such as commercial paper, treasury bills, etc., will be trade in the money market.

B) Capital Market

The capital market sees the transactions of long-lived assets such as houses, land, etc.

C) Stock Exchange

The stock market is a type of capital market where previously issue securities change hands for investors.

D) Spot Market

Real-time transactions between buyers and sellers occur in cash and on the spot market.

e) Futures Market

In the futures market, financial transactions are made, but deliveries are expect at a specific date in the future, set in the present.

F) Foreign Exchange Market

The foreign discussion market is the market where national currencies are trade worldwide. It is also known as FOREX market or FX market.

G) Debt Market

Fixed credit or proof of debt such as bonds, deeds, debentures, bills of exchange, leases, promissory notes, etc., are trade in the credit market.

h) Listed Market

A centralized organization regulates this type of market, and transactions occur in a physical environment between buyers and sellers.