What is meant by "market" in economics?

Question

Accepted Answer

In economics, a market does not require a single physical location. It exists wherever buyers and sellers of a commodity or service are in contact with one another — directly, face to face, or indirectly through telephone, an agent, or the internet — such that a price can be settled and the good can change hands. Essential elements include a commodity, buyers and sellers, an area over which they are spread, some form of contact between them, and a price arrived at through their interaction. The share market and an online marketplace are both "markets" in this economic sense, even without a single physical meeting place.

✓Final answer

A market, in economics, is the network of buyers and sellers of a commodity — in direct or indirect contact, over any area — through which a price is settled and exchange takes place.

Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set ANNUAL1 markMCQ
$Q. Revenue per unit of output sold - Marginal revenuе Marginal cost Average revenue Total revenue$
(a) a, b, c
(b) a, c, d
(c) only c
(d) only b
›Reveal solutionSolution
Revenue per unit of output sold = Average revenue, so the answer is only c.

Average Revenue (AR) is total revenue divided by the number of units sold, i.e. revenue earned per unit of output. Since total revenue equals price multiplied by quantity, average revenue works out to be equal to the price of the commodity. This is exactly what the statement 'revenue per unit of output sold' describes.

(a) Marginal revenue is the addition to total revenue from selling one more unit.

(b) Marginal cost is a cost concept, not revenue.

(d) Total revenue is the whole receipt from all units, not per unit.

✓Final answer
$Correct option: only c — Average revenue.$
CBSE 2023Set ANNUAL1 markMCQ
$Q. Find the odd word out: Revenue concepts:$
(a) Total Revenue
(b) Average Revenue
(c) Total Cost
(d) Marginal Revenue
›Reveal solutionSolution
The odd word is Total Cost — it belongs to the family of cost concepts, while Total Revenue, Average Revenue and Marginal Revenue are all revenue concepts.

Revenue is the money receipt a firm earns by selling its output:

Total Revenue (TR) = price × quantity sold.

Average Revenue (AR) = TR ÷ quantity = price per unit.

Marginal Revenue (MR) = the addition to TR from selling one more unit.

Total Cost (TC), in contrast, is the total expenditure a firm incurs on the factors of production (fixed cost + variable cost). It measures spending, not earnings, so it does not fit with the revenue concepts.

✓Final answer
$The odd word out among the revenue concepts is Total Cost .$
CBSE 2022Set ANNUAL1 mark
$Q. Give economic terms. Revenue per unit of output sold.$
›Reveal solutionSolution
The economic term is Average Revenue (AR) — revenue per unit of output sold, i.e. AR = Total Revenue / Number of units sold.

A firm's revenue concepts are:

Total Revenue (TR) — total receipts from selling a given quantity (Price x Quantity).

Average Revenue (AR) — revenue per unit sold = TR / Quantity. Since TR = Price x Quantity, AR is equal to the price of the commodity, so the AR curve is the firm's demand curve.

Marginal Revenue (MR) — addition to total revenue from selling one more unit.

The definition 'revenue per unit of output sold' matches average revenue.

✓Final answer
$Revenue per unit of output sold = Average Revenue (AR)$

> [!ANSWER]
> A market, in economics, is the network of buyers and sellers of a commodity — in direct or indirect contact, over any area — through which a price is settled and exchange takes place.

Q.What is meant by "market" in economics?

Concept understanding — Meaning and Classification of Market

Q.What is meant by "market" in economics?

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