1. What is a market? A market exists wherever buyers and sellers can communicate and exchange goods for money. Traditionally, markets were physical places such as town markets or country fairs. Today, using the Internet, telephones and publications such as newspapers and magazines, markets can exist anywhere that buyers and sellers can contact each other. These can be physical places, such as shops and supermarkets, or virtual spaces, such as the Internet or the fi nancial and labour markets. In a market customers decide what they want to buy. Businesses use their resources to supply goods or services at a price that will allow them to earn a profi t.
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The world is full of markets. If something can be bought and sold, then there should be a market for it. There are many different types of markets. Here are some examples: The chocolate market consists of buyers (consumers) and sellers (confectionary companies such as Cadbury’s, Mars and Nestlé) of chocolate products. The car market consists of buyers and sellers of cars. Within the car market there are specifi c market segments, such as the market for new cars and the market for second-hand cars, as well as different types of cars. The labour market consists of all buyers (employers) and sellers (people looking for jobs) of human skills. Within the labour market there are many different skills segments with different levels of demand and supply. Some skills, such as doctors or talented professional football players, may be in high demand but relatively low supply. Other jobs, such as zookeepers, may be in relatively low demand and supply. The fi ne art market consists of buyers (art galleries, private collectors) and sellers (artists, agents, dealers) of works of art. By their nature, works of art tend to be very rare which means that demand for good art always exceeds supply.
