Types of Market

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A market is a place where buyer and seller transact goods and services among themselves, but in some market, there are fewer sellers and in some higher, similarly in some markets there are fewer buyers and in some higher, etc. That is why markets are classified according to their nature so that the market can be understood and assessed. The market is classified on the basis of product, number of buyer and seller, competition, etc.

Mainly the market is divided into perfect competition, imperfect competition, and non-competition but these are further classified for better understanding. Note that forming a market does not require a large number of buyers and sellers; It can also be formed by just one buyer and one seller. A market is also formed for a single product. In simple language, wherever there is a buyer, seller, product, and transaction, it is called a market.

Types of Market

Following are the types/classifications of market:

1. Perfect Competition Market:

A perfect competition market is a type of market where a large number of buyers and sellers transact goods and services among themselves. All buyers have complete information about the product and sellers are price takers in this market. In this market, substitute products are available, and buyers have a lot of options for sellers. This market is found only in books and not in reality because its features and nature are not found in the market.

2. Monopolistic Competition Market:

A monopolistic competition market is a type of market in which there are a large number of buyers and sellers of the same type of goods and services, but all the goods and services differ from each other, this variation is in price, brand, color, quality, quantity, etc. Examples of monopolistic competition markets are hotels, restaurants, cinema halls, consumer products, etc. Nowadays this market is seen more often.

3. Monopoly Market:

A monopoly market is a type of market where there is only one seller and a large number of buyers and there are no close substitutes available for the product. The buyer has incomplete knowledge about the product and the seller may discriminate in price. Due to a single seller in the market, the seller can sell the product at a higher price and make a high profit. Nowadays monopoly markets are rarely seen because the government is promoting liberalization, privatization and globalization.

4. Duopoly Market:

A duopoly market is a type of market where there are only two sellers and a large number of buyers. In this market buyers have incomplete information about the products and their preferences towards sellers may vary. There may be more competition among sellers due to there being only two sellers. If sellers want, they can earn more profits by making mutual agreements, but doing so can be a legal offense because it affects the market. Nowadays, duopoly markets are rarely seen.

5. Oligopoly Market:

An Oligopoly market is a type of market where there are only a few sellers of a product and a large number of buyers. In this market, substitute products are available, and the seller can set the price of the product keeping in mind the competitors. They can dominate the market even though there are very few sellers in the market. In an Oligopoly market, buyers have incomplete information about the product and may have different preferences toward sellers.

6. Monopsony Market:

A monopsony market is a type of market where there is only one buyer and a large number of sellers. This market is exactly the opposite of the monopoly market because in a monopoly market, there is only one seller and a large number of buyers and in this market, there is only one buyer and a large number of sellers. All sellers sell the product to only one buyer and the buyer has the option to buy the product from different sellers. Due to the large number of sellers and only one buyer in this market, buyers enjoy bargaining power.

7. Duopsony Market:

A duopsony market is a type of market where there are only two buyers and a large number of sellers. Due to the large number of sellers in this market, substitute products are available. In a duopsony market, all sellers sell products to only two buyers. Competition among sellers is high in this market because there are only two buyers in the market. In this market buyers and sellers may have different preferences and buyers may enjoy bargaining power.

8. Oligopsony Market:

An oligopoly market is a type of market where there are only a few buyers and a large number of sellers. This market is exactly the opposite of the oligopoly market because in an oligopoly there are only a few sellers and a large number of buyers and in this market, there are only a few buyers and a large number of sellers. In this market substitute products are available, and buyers may have different preferences towards sellers. In this market, buyers have bargaining power which they can exercise if they wish.

9. Bilateral Monopoly Market:

A bilateral monopoly market is a type of market where there is only one seller and only one buyer. This market is a combination of “monopoly market” and “monopsony market” because the features of both the markets are found in this market like single buyer, single seller, etc. In this market, both parties are dependent on each other because there is only one buyer who buys the product and there is only one seller who sells the product. There is more mutual consent in this market and both parties try to maintain the relationship between them.

Read Also:

• What is Market? Meaning, Features, and More.
• What is a Perfect Competition Market? Meaning, Features, and More.
• What is a Monopolistic Competition Market? Meaning, Features, and More.
• What is a Monopoly Market? Meaning, Features, and More.
• What is a Monopsony Market? Meaning, Features, and More.
• What is a Duopoly Market? Meaning, Features, and More.
• What is Duopsony Market? Meaning, Features, and More.
• What is an Oligopoly Market? Meaning, Features, and More.
• What is Oligopsony Market? Meaning, Features, and More.
• What is Bilateral Monopoly Market? Meaning, Features, and More.

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