Markets

Rini Novrianti Sutardjo Tui

Market: Definition

Buyer

Seller

Market: Function

Determining price

Providing goods
and service for
the future

Organizing production

Distributing goods and services

Types of Market
Output Market

Commodity
Market

Industrial
Market

Input Market

Consumer
Market

Invisible Market

Over
telephone
lines

Buyer

Seller

Market
Business
Transaction

Via
mails

Online

Output Market

Competition
Perfectly
competitive
Perfectly

uncompetitive

Time

Daily
Weekly
Monthly
Annually

Form
Abstract
Concrete

Market
Area

Local
Regional
National
Internati
onal

Input Market

Owner of
production
factors

Input for producing

goods or services

Company

Consumer Market
Consumers
interact
with sellers
to buy
goods and
services

Market
Sellers can
use other
sales media

Sellers can
be retailers

Industrial Market

Industrial Market

Business
organizations sell to
other businesses

Not a final consumer

These other
businesses use what
theyve bought to
make new products

Commodity Market
Functions

Benefits
For sellers:
Easier to market or
to sell

Gathering
info
For buyers:
Easier to get or to
buy

Managing
trade

Trading
place

For government:
Providing foreign
exchange

Market: Rich and Poor Countries

Commodities
Market often have

Commodities
themselves often

their centers in
developed countries
(UK, USA, Netherlands).

originate in the developing

world (Latin America,
sub-Saharan Africa).

Market: Structure
The number of firms in the industry
The nature of the product produced
The degree of monopoly power of each firm has
The degree to which the firm can influence price
Firms behavior-pricing strategies, non-price
competition, output levels

The extent of barriers to entry

The impact on efficiency

Market: Monopoly

Monopoly
by law
One
seller
A lot of
buyers
No
substitution
goods

High
barrier
to
entry

Monopoly
by license

Monopoly
by nature

Market: Oligopoly

Few
sellers
Capital
intensive

Medium
barrier
to entry

Policy
of price

Standar
dized
product

Oligopoly
with
cooperation

Oligopoly
without
cooperation

Market: Monophony

One buyer

No
bargaining

Thank You