The term ‘market’ is usually used to mean the place where buyers and sellers meet to transact business. In Business studies, however, the term ‘market’ is used to refer to the interaction of buyers and sellers where there is an exchange of goods and services for a consideration.
NOTE: The contact between sellers and buyers may be physical or otherwise hence a market is not necessarily a place, but any situation in which buying and selling takes place. A market exists whenever opportunities for exchange of goods and services are available, made known and used regularly.
- Product market; Is a particular market in which specific goods and services are sold and with particular features that distinguish it from the other markets.
-The features are mainly in terms of the number of sellers and buyers and whether the goods sold are homogeneous or heterogeneous
-Product market is also referred to as market structure.
-Markets may be classified according to the number of firms in the industry or the type of products sold in them..
TYPES OF PRODUCT MARKET
The number of firms operating in a particular market will determine the degree of competition that will exist in a given industry. In some markets there are many sellers meaning that the degree of competition is very high, where as in other markets there is no competition because only one firm exists.
When markets are classified according to the degree of competition, there are four main types, these are;
- Perfect competition
- Pure monopoly(monopoly)
- Monopolistic competition