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Types of Markets
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Barter Market
Exchange of goods or services without using money, direct trade, value is subjective. Example: Local community exchange trading systems (LETS).
Monopoly
Single seller, unique product, high barriers to entry, price maker. Example: Local electricity providers.
Natural Monopoly
High fixed costs, large economies of scale, single seller. Example: Utilities such as water and gas services.
Perfect Competition
Many buyers and sellers, no single entity can influence the market, homogeneous products. Example: Agricultural markets.
Auction Market
Price determined by bidding, transparent sale process, single seller multiple buyers. Example: Art auctions at Sotheby's.
Monopolistic Competition
Many sellers, product differentiation, some control over price. Example: Retail clothing brands.
Financial Markets
Trading of financial securities, efficient allocation of capital, includes stock and bond markets. Example: New York Stock Exchange.
Foreign Exchange Market
Trading currencies, determines currency exchange rates, 24-hour trading. Example: USD/EUR currency pair.
Oligopoly
Few large producers, barriers to entry, interdependent decision-making. Example: Automobile industry.
Factor Markets
Markets for inputs (labor, land, capital), determined by demand and supply of factors. Example: Labor market for software engineers.
Monopsony
Single buyer, controls market purchases, price setter for inputs. Example: Defense industry procurement.
Duopoly
Market with two producers, potential for tacit collusion, strategic interactions. Example: Boeing and Airbus in the large commercial aircraft market.
Commodity Markets
Trading standardized raw materials, price discovery, futures contracts. Example: Crude oil traded on the NYMEX.
Bilateral Monopoly
One seller and one buyer, negotiation determines price, unique market dynamics. Example: Exclusive negotiation between a professional sports team and a stadium.
Predatory Pricing Market
Entities temporarily set low prices to drive out competition, after which prices rise again. Example: Large retailers selling below cost to undercut small shops.
Franchise Market
Buying and selling of franchise rights, branded business models, franchisor-franchisee relationship. Example: Fast-food franchise like McDonald's.
Black Market
Illegal or unregulated trading, often due to prohibition or price controls. Example: Smuggled goods in a country where they are banned.
Stock Market
Equity shares of companies traded, represents ownership, stock exchanges facilitate trading. Example: NASDAQ.
Spot Market
Immediate trade of goods and services, current market price, physical or virtual trading. Example: Electricity spot market.
Futures Market
Buying and selling of contracts for future delivery, standardized contracts, used for hedging or speculation. Example: Gold futures contracts.
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