What is a market and how is it created?
The market is the place where supply and demand meet. It arises from the needs (deficiencies) of the consumers who want to be satisfied.
If the needs are covered by purchasing power, they become a necessity. If the needs of the consumers are large enough, it becomes demand and hits the market offer on the market. The offer are produced goods and services provided by companies.
One differentiates the market types according to different ranges:
- Subdivision of the markets to the subject (to the matter)
- Consumer goods or market; Goods for the final consumer, such as food
- Capital goods market; Goods for the production of other goods such as machines
- Money market; Provision of short-term capital (<1 year) by banks, private individuals
- Capital markets ; Provision of long-term capital (> 1 year) by banks, private individuals
- Labor market; Supply and demand of human labor
- Real estate market; Sale and purchase of plots and buildings
- Foreign exchange market ; Purchase and sale of currencies
- Services market; Eg trade with insurance companies
- Special market; Trade of special goods, eg delicatessen
Division of markets by territory
- Global market (worldwide, across Europe, neighboring countries)
- Internal market (in Germany eg Germany, regional eg Saxony, urban, eg in Leipzig)
Structure of the markets according to their function
- Procurement market (where I bring goods for production?); Domestic and import market
- Market ; (where I sell finished products?) Domestic and export market
Breakdown by time (duration)
- Weekly market (eg market day once a week)
- Year market (eg Christmas market)
Organization of the markets according to their organizational forms
- highly organized, such as exchanges or fairs
- Not organized or very little, such as shops where supply and demand coincide randomly (the most common form)
Which market types are differentiated?
From market types is used when the access is considered the market.
- free market; No access restrictions for market participants
- limited markets; Restricted access for market participants by economic or legal requirements, such as minimum capital requirements, authorizations or concessions
Which market forms are differentiated?
The difference in the market forms is the number of suppliers of a similar product compared to many buyers.
Who are the market participants?
Market participants are individuals, governments, banks, businesses and residents who offer their goods and / or services and ask.
In order to represent all economic actions within an economy and beyond, simplifications are inevitable.