Characteristics of market | Market process | Economics and management

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A market is characterized by the interaction of buyers and sellers, a specific commodity being traded, a defined area (physical or virtual), price determination through supply and demand, and a competitive structure

. It functions through voluntary exchange, with participants aiming to maximize utility or profit while interacting in a competitive environment

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Key characteristics of a market include:

Buyers and Sellers: There must be at least one buyer and one seller to conduct an exchange.

Interaction/Contact: Buyers and sellers do not need to be physically together; modern communication allows interaction to occur anywhere.

Commodity/Service: A product or service must exist to be exchanged.

Price Mechanism: The price for goods is determined by the forces of demand (buyers) and supply (sellers).

Area: It refers to the entire region where buyers and sellers are spread, not just a physical location.

Competition: Markets feature varying degrees of competition, ranging from perfect competition (many sellers, identical products) to monopoly (one seller, unique product).

Free Exchange: Participants have the freedom to buy or sell based on their own choices.

Information Flow: Transparent information helps participants make informed decisions, though it varies by market typ