Market , Microeconomics

 

What is a Market?

Markets

A geographically stated area where buyers and sellers interact or communicate to decide the price of a product or a series of products.

Markets vs. Industries

Industries are the supply part of the market.

Defining the Market

The market parameters should be set before an evaluation of the market occurs.

Arbitrage

Purchasing a product at a less price in one location and selling at a large price in another market.

Competitive vs. Noncompetitive Markets

– Competitive Markets

Due to the large number of buyers and sellers, no particular buyer or seller can effect the price.

Instance: Most agricultural markets

– Noncompetitive Markets

Markets where individual manufacturers can effect the price.

Instance: OPEC

-Market Price

– Competitive markets maintain one price.

– Noncompetitive markets may set various prices for the particular product.

Market Definition - The Extent of a Market

– Market Definition

Which buyers and sellers must be involved in a particular given market?

– Market Extent

States the boundaries of the market

Geographic

variety of products

– Instances

– Geographic boundaries

Gold: Karachi vs Lahore 

Housing: Rawalpindi vs. Islamabad 

– Variety of Products

Gasoline: super, regular, & diesel

Cameras: point & shoot, Polaroid, digital

– Markets for Prescription Drugs

Well-established markets - therapeutic drugs

Ambiguous or confusing markets – painkillers

 

Posted Date: 7/24/2012 6:59:08 AM | Location : United States







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