Lecture 7: Dimensions
1. On the basis of free intercourse or degree of competition
a. Perfect market: A market said to be perfect, when all potential sellers and buyers are
promptly aware of the prices at which transaction takes place, any buyers can purchase
from any sellers. The principle underlying a perfect market expects that there must be a
uniform price for any one standardized commodity at a particular time at any place, there
should not be restriction on the movement of a commodity, there must be a good number
of buyers and sellers.
b. Imperfect market: A market is said to be imperfect where, some buyers or sellers or
both are not aware of the prices at which transactions takes place. There is restriction for
movement of goods.
Imperfect markets are:
a. Monopoly market: There is only one seller of the commodity
b. Duopoly market: It has two sellers of a commodity.
c. Oligopoly market: There are more than two but a still a few sellers of commodity
d. Monopolistic competition: A large number of sellers will deal in heterogenous and
differentiated form of a commodity.
2. On the basis of time:
a. Very short period markets: These are for few hours and are mostly for highly
perishable commodities like fruits, vegetables, fish, milk, etc.
b. Short period market: In these markets commodities are perishable and can be traded
for some time. These commodities are like foodgrains and oilseeds.
c. Long period markets: Time span available is long to adjust supply to meet demand even by managing production. These markets can be for machinery and manufactured
3. On the basis of nature of commodities (Type of goods transacted):
a. Commodity markets
b. Produce exchange- commodities are produced and not manufactured. Generally one
market in one commodity. e.g. cotton exchange Mumbai.
Manufactured goods markets: These are markets of manufacture and semi
manufactured goods. For e.g. Leather exchange of Kanpur
Precious stones: These are highly specialized and well organized markets of world
for e.g. bullion market of Mumbai
Money markets: Broad term include a number of agencies providing a finance to
business. These are at large trading centers like Mumbai, London Foreign exchange
market: It is international market and largely concerned with export and import trade of
Stock exchange: This is market for investments stocks bonds debentures shares are
purchased and sold in different parts of the countries for e.g Calcutta and Madras stock
4. On the basis of area of coverage:
1. Village Markets: Buying and selling activities are confined among buyers and sellers
of the village or nearby villages mostly for perishable a commodities.
2. Regional markets: (District/ Sate) Buyers and sellers for among commodity are
drawn large area than the local markets in India there generally exist for food grains.
3. National Markets: Buyers and sellers are at Natio