CHAPTER 30 – DEMAND AND SUPPLY Markets are where the distribution of economic resources takes place. i
A market is any place where buyers and sellers can exchange goods and services.
TYPES OF MARKET
In an economy, there are different types of markets. Some markets have lots of businesses in competition with each other, while other markets consist of a single business as the only supplier of a good or service.
Perfect Competition In a perfect competition market, there are many sellers of an identical product.
In this type of market:
• The goods or services supplied by each seller are exactly the same. • Each seller supplies a small part of the market and so cannot influence the market price. • Each seller wants to make as much profit as possible. • There are no barriers to entering the market.
In reality, it is rare that a perfect competition market exists because sellers usually try to offer an original product. Example
Jack Finnegan is a fisherman living on the west coast of Ireland. He sells his fresh produce direct to consumers from his van. He has competition from four other fishers who are also selling direct to customers in the area. The produce they are selling is identical to Jack’s.
