Q.Define market in the economic sense and state any two bases on which markets are classified.

In economics a market is about contact between buyers and sellers, not a place.

Meaning. In ordinary usage a market means a place where goods are sold. In economics it has a wider meaning: a market is the entire set of buyers and sellers of a commodity who are in close contact — by any means, including telephone and the internet — such that the price of the commodity tends to be the same throughout. The emphasis is on contact and a common price, not on a location.

Bases of classification (any two):

1. Number of sellers — one seller (monopoly), a few (oligopoly), many (monopolistic competition), or a very large number (perfect competition).
2. Nature of the product — homogeneous (identical, as in perfect competition) or differentiated (close substitutes, as in monopolistic competition).
3. Conditions of entry — free entry (perfect and monopolistic competition) or blocked/difficult entry (monopoly, oligopoly).

Defining a market as a physical place — the economic definition stresses contact between buyers and sellers and a uniform price, not location.