Naguilian ALS Community Learning Center

Ortiz, Naguilian, La Union

Name: Basic Level: AE Score: LAS#17

ALS SCHOOL: Schedule: Date:
Type of Activity:
Extended Learning (Individual Practice) Classroom Encounter Others

Strand #4: LIFE AND CAREER SKILLS

Lesson: Market and Market System
Competency: Understand market and market system
Code : LS4LC-AE-PSB-JHS-17
Learning Intent:
 Let the learners understand market and market system.
Value Emphasis:
Gain knowledge about market and market system.
References: ALS Curriculum guide,  
https://www.britannica.com/topic/market
https://www.technoserve.org/our-work/what-is-a-market-system/
A. PRE-TEST
A. Put a check mark in the blank if it is a good characteristic of an entrepreneur.
____________1. Time sense
____________2. Tardiness
____________3. Alertness
____________4. Honesty
____________5. Un open minded
____________6. Selfish
____________7. Energetic
____________8. Accuracy
____________9. Impoliteness
____________10. Trustworthy

B. CONCEPT NOTES:

What is market?

Market, a means by which the exchange of goods and services takes place as a result of buyers
and sellers being in contact with one another, either directly or through mediating agents or institutions.
What is a Market System?

What is market system?

A market system is the network of buyers, sellers and other actors that come together to trade in
a given product or service.

The participants in a market system include:

Direct market players such as producers, buyers, and consumers who drive economic activity in
the market

Suppliers of supporting goods and services such as finance, equipment and business consulting

Entities that influence the business environment such as regulatory agencies, infrastructure

providers and business associations

A market system can be specific to a product (coffee, mangoes, dairy) or a cross-cutting sector (finance,
labor, business development services). A market system’s strength depends on how well the participants
obtain financing, launch businesses and adopt new technologies and best practices. Below are example:

5 Different Types of Market Systems & Four Types of Market Structures

Markets: A Market which can be defined as a total number of buyers and sellers in the region or area

covered by the attention. The reason or area may include earth, states, country or cities.

The value of the items and cost or price are traded by people mainly depends on supply and demands in
the markets. The nature of markets can be a physical body or might be virtual, it may also be a global

market or local market, perfect market and imperfect market. As we have different types of markets and all

the markets are not the same and similar. We can divide the market based on different nature and

competition level.

Different types of market structure will decide an economy. These kinds of market structures necessarily

refer to the degree of competition in a market. Other components of market structures are the nature of

product & services, number of the seller, numbers of consumers, economics scale. Let us discuss different

types of markets in detail. Other things to know that not all types of market present but many of them just

known, they help us understand the main purpose of market structure classification.

Here are the 5 Different Types of the Market Structures

#1 Perfect competition

When we talk about the perfect competition market it means that there is a massive number of buyers and

sellers. When it comes to competition all the sellers in the market are smaller in competition with each other.

In these types of the market no big player to influence the market.  So each and every firm in this market are

price takers. When we talk about the perfect competition market few things come in mind. This is one of the

reasons it is a theoretical concept. The things can be as follow

 All the product in this market are completely identical

 Every firm and seller has only one motto of maximum profit.

 In this market, anyone can enter and exit at any time

 Here no one cares for customer perfection

#2 Monopolistic Competition

This type of market is more practical which happens in the real world. When we talk about the monopolistic

competition a large number of buyers and sellers exist here. But they do not sell the same product. Actually,

all the product in this market is a similar but slightly different type of product.

Now here it comes the point of customer perfection because buyers can go for one over the other product.

But the seller can charge an extra amount for the product because they have market power. Now at some

point, the seller becomes the price setter. For instance, we can take an example of toothpaste for

Monopolistic Competition.

#3 Oligopoly

In this type of market, there are only a few numbers of firm or seller but the customer are much larger than

those firms. So here the seller has the market influence they set the price of the product in this case the

customer becomes the price taker. Also, the firm collaborates with each other to compete with others. While

the seller sets the price of the product they maximize their profit. In this kind of market, it is more difficult to

enter because the new firm finds itself quite difficult to establish.

For example, we can say the cellular industry as an Oligopoly market, because there is a limited provider

which are actually priced setter and consumers don’t have many options to choose from.

#4 Monopoly

When we talk about the monopoly competition there is only one seller/firm, so the single seller controls the

whole market and sets the price according to their need because it has the power market. In this case,

buyers do not have any other choice so they have to pay the price set by the seller. So, in this competitive

market customers do not have power and the market forces become irrelevant. Actually, this type of market

is the rate in the real world.

#5 Monopsony

As compared to another competitive market this type of market does not have a large number of buyers and

sellers. Here is the only buyer to particular products and services. So, the customer has all the power to set

the price of those particular products and services. Here consumer becomes the price setter and the firm

becomes the price taker.

There are Mainly two Types of Market Namely Economic Markets and Physical Markets.
 Economic Markets: some of the famous types of markets included in these areas – Financial

Market, Media market, Foreign exchange market, Stock market, Real estate marketing, agriculture

marketing, Niche market, Energy market, etc.

 Physical Markets: Example of this kind of market can include these – Bazaar, Fish market, Grocery

market, Market town, Street market, Supermarket, Public market, Farmer’s market, etc.

Different Nature and Types of Market

 Available Market: It is a kind of market where all the people in that area can easily get the goods

within the available market. Mostly daily use products and services sold in this type of market because

transportation can be costly for these products.

 Market Minimum: This type of the market is small in size where people can buy goods or products

without much marketing efforts. From this type of market, the lowest sales company can get without

taking any action. Today this type of market are getting even lower.

 Market Potential: It is the type of maximum market size where people can buy goods or products is

subject to great marketing action can a company take. The upper limit for sales and marketplace within

the market potential.

Types of Market-Based on Geo Location

 Local Market: This type of market is located in a small area like a small town or in a village. People

can buy and sell their daily needs goods here. Transportation of this type of product can be costly.

 Regional Markets: This kind of market cover a wide range of area which can be district, cities, and

It is a bigger market than comparing to the local market.

 National Markets: This types of market cover the whole country and allow to transported goods

anywhere in the county as per requirement and prevent the goods to be transported outside the

boundaries of the country.

 International Market: when it comes to international market goods and services can be traded

internationally and transported to the outside of the country. Here the demand can be in bulk so that it can

be transported.

Different Types of Market-based on Time

 Very Short Period Market: Here the price of the product depends on the demand. If demand is high

the price will be high and the demand is the low price will be less. i.e. Vegetable market and flower

market.

 Short Period Market: This is for a longer period than the very short period market, where demand

can be adjusted and the price can also be modified.

 Long Period Market: This types of market product supply can be changed based on the market So,
 it depends on the market demand and changes the production as per need. The price of the product can

be different in different time periods because the price is set according to demand and supply.

Market-Based on Types of Transaction

 Spot Market: It is also called the cash market because here the product charges are being paid in

cash at the time of product delivery. So, here the credit system is not available.

 Future Market: This is the type of market where the credit system works. So, people are being

promised to be paid in the future. It is called the future market.

Some of the Famous Markets in Details

Foreign Exchange Market:

It is a global market that trades the currency value in a different mode. where things like buying, selling and

exchanging of different currencies at the current valuation or price. this enables people to exchange their

money with ease of exchange facility.

Stock Markets:

It is also known as the share market or equity market. It is the types of markets where people buy and sell

the share and stock which let them claim on business as a shareholder. Stock markets may include

securities funds and some private funds too. Stock exchange market list shares of common equity and other

securities too.

Financial Markets:

Financial markets are the types of the market where people trade financial securities as well as commodity,

and at low value or prices which depends on supply and demand chain. This types of the market include

physical location and an electronics system as well. The term financial markets often used to refer raise in

finance.

Media Markets:

The media market is also known as the newscast market, media field, labeled market area and TV

marketing area. Here people are being offered similar television or radio station. It also includes different

types of offers like newspapers and online content.

Agriculture Marketing:

It generally covers the services used to transport or moving the agriculture products from farm to consumer.

It is also a well-organized system to manage harvesting, grading, packing, storage, transport, food

processing, distribution, and sale.

B. Checking for Understanding (POST TEST)

 A. Multiple choice. Write the correct answer on the blank provided before each number.

_______1. What do you call the exchange of goods and services takes place as a result of buyers and
sellers being in contact with one another?
A. Mall C. Church
B. Market D. School
_______ 2. Who drive economic activity in the market?
A. Suppliers of supporting goods and services.
B. Direct market players
C. Customers
D. Buyers
_______3.  When a market is in equilibrium with no external influences and no external effects, it is said to
be in a state of _____________ optimality.
A. Community C. Efficient
B. Pareto D. Producer
E. Consumer
_______4. When examining the topic of market failure, the supply curve can be referred to as the:

A. Marginal social benefit C. Marginal social cost

B. Community surplus D. Producer surplus

E. Consumer surplus

_______5. The marginal social benefit is represented by the ________________.

A. Opportunity cost C. Community surplus

B. Supply curve D. Demand curve

E.  All of the above

_______6. Community surplus cannot be maximized in the real world because:

A. Markets are influenced by government forces.

B. Markets are determined by supply and demand concerns.

C. Profit maximization is always the goal.

D. There are free market economic policies in most developed countries.

E. Markets are not perfect.

________7.  When community surplus is not maximised there is:

A. Market failure

B. Loss of government revenue

C. Loss of consumer surplus, but not producer surplus

D. Loss of producer surplus, but not consumer surplus

E. Protests from left wing political groups.

_______8.  When market failure occurs governments may intervene in order to:

A. Restore market equilibrium

B. Reduce company profits, and increase producer surplus

C. Move towards the optimal allocation of resources

D. Increase consumer surplus, but not producer surplus

E. All of the above.

________ 9. Which of the following is not a reason why markets fail?

A. Lack of Public Goods

B. Under Supply of Merit Goods

C. The existence of externalities

D. Perfect Competition

E. Imperfect Competition.

 
________10.  Which of the following is an example of imperfect competition?

A. Monopolists restricting output in order to push up prices

B. Firms engaging in formal and tacit collusion

C. Price fixing using cartels

D. Oligopolistic market structures

E. All of the above.

II. Essay
1. If you will become an entrepreneur someday what type of business do you want to put up
and how will you market or promote your product to gain a high income?

Prepared By:
MARIA LITA A. CALICA
District ALS Coordinator
Naguilian District