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Economic Institutions Market Structures

Market exchange is the process of buying and selling goods and services, serving as the foundation of modern economies. Markets can be classified by their structures, such as pure competition, monopoly, monopolistic competition, and oligopoly, each with distinct characteristics and pricing controls. Various types of markets exist, including physical, virtual, auction, and black markets, each facilitating different forms of transactions and exchanges.
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0% found this document useful (0 votes)
44 views24 pages

Economic Institutions Market Structures

Market exchange is the process of buying and selling goods and services, serving as the foundation of modern economies. Markets can be classified by their structures, such as pure competition, monopoly, monopolistic competition, and oligopoly, each with distinct characteristics and pricing controls. Various types of markets exist, including physical, virtual, auction, and black markets, each facilitating different forms of transactions and exchanges.
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ECONOMIC

INSTITUTIONS
MARKET
EXCHANGE
Market Exchang
 Market exchange is
the process of
buying and selling
goods and services.
 It's the foundation of
modern economies,
connecting
producers and
What is a market?
Place for Trade Price Determination
A market is a physical or Market forces, including
virtual space where supply and demand,
buyers and sellers meet determine the prices of
to exchange goods and goods and services.
services.

Competition
Competition among buyers and sellers helps drive
efficiency and innovation in the market.
MARKET
•A market is a place or
medium where buyers
and sellers interact to
transact economic
goods and services.
MARKET
• The meaning of market is not
limited to a certain place,
location, or geographic area;
rather, it focuses on people
who are willing and capable of
buying or selling goods and
MARKET
• In a capitalist economy,
markets answer the three
basic economic problems of:
what to produce, how to
produce, and for whom to
MARKET
STRUCTURES
• Market structure is the classification of a
market with regard to key characteristics;
• number of sellers and buyers
• entry barriers to the market
• the control and determinant of pricing
• types of products in the market.
MARKET
STRUCTURES
• Pure competition market
• a large number of sellers and
buyers
• homogenous product
• complete freedom of entry and
exit of market players.
MARKET
STRUCTURES
• Monopoly
• Single seller of a well-defined product for
which there is no available substitute and high
barriers of entry of other market players.
• The seller has complete control of the pricing
of goods and services.
MARKET
STRUCTURES
• Monopolistic competition
• large number of independent
sellers each producing a
differentiated product in the
market with a low barrier to
entry of other players.
MARKET
STRUCTURES
• Oligopoly
• few sellers comprise the entire
industry with a relatively larger
number of buyers.
• Sellers, therefore, have the
power over the price of
MARKET
STRUCTURES
• Oligopoly
• few sellers comprise the entire
industry with a relatively larger
number of buyers.
• Sellers, therefore, have the
power over the price of
MARKET
STRUCTURES
• Monopsony
•market in which
there is only one
buyer.
MARKET
TRANSACTIONS
MARKET
TRANSACTIONS
• It is the exchange of goods
and services through a market
where buyers and sellers agree
on the price and quantity of
goods and services to be
bought and sold in a specific
MARKET
TRANSACTIONS
• Market transactions taking place in the
economy could be a tool in:
• measuring the total output of the economy or
the Gross Domestic Product (GDP) of the
country thereby becoming one indicator of
growth and development of a society, and
• providing the basic data that are used by
economic planners and forecasters.
TYPES OF MARKET
•PHYSICAL MARKETS
• This is a set up where buyers
can physically meet the
sellers and purchase the
desired merchandise from
them in exchange for money.
TYPES OF MARKET
• Non-Physical Markets or
Virtual Markets
• In such markets, buyers
purchase goods and services
through the internet. The
buyers and sellers do not meet
TYPES OF MARKET
•Auction Market
•In an auction market,
the seller sells his or
her goods to the
highest bidder.
TYPES OF MARKET
•Market for Intermediate
Goods
• Such markets sell raw
materials (goods)
required for the final
TYPES OF MARKET
•Black Market
•This is a setup where
illegal goods like drugs
and weapons are sold.
TYPES OF MARKET
•Knowledge Market
• This is a setup that deals
with the exchange of
information and
knowledge-based
TYPES OF MARKET
•Financial Market
•This market deals with
the exchange of liquid
assets (money).
TYPES OF MARKET
•Financial Market
• Stock market- buyers and sellers shares
• Bond market- exchange of debt
securities
• Foreign exchange market
• Predictive market- for future use

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