Market and
Monopolies
The term ‘market’, as used by
economists, is an extension of the ancient idea of a market as a place where
people gather to buy and sell goods. In former days part of a town was kept as
the market or marketplace, and people would travel many kilometres on special
market-days in order to buy and sell various commodities. Today, however,
markets such as the world sugar market, the gold market, and the cotton market
do not need to have any fixed geographical location. Such a market is simply a
set of conditions permitting buyers and sellers to work together.
In a free market, competition
takes place among sellers of the same commodity, and among those who wish to
buy that commodity. Such competition influences the price prevailing in the
market. Prices inevitably fluctuate, and such fluctuations are also affected by
current supply and demand.
Whenever
people who are willing to sell commodity contact people who are willing to buy
it, a market for that commodity is created. Buyers and sellers may meet in
person, or they may communicate in some other way : by letter, by telephone, or
through their agent. In a perfect market, communications are esay, buyers and
sellers are numerous and competition is completely free. In a perfect market there
can be only one price for any given commodity : the lowest price which sellers
will accept and the highest which consumers will pay. There are, however, no
really perfect markets, and each commodity market is subject to special
conditions. It can be said however that the price ruling in a market indicates
the point where supply and demand meet.
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