Q.Classify markets on the basis of area, with one example of each.

Markets differ in how geographically widespread their buyers and sellers are, which is the basis for classifying them by area.

Classification by area looks at the geographical spread of the buyers and sellers who deal in a particular commodity or service. A local market is confined to a small area, usually because the product is perishable, bulky in relation to its value, or has demand limited to that locality — fresh vegetables sold within a town are a good example, since transporting them far would spoil the product or make transport uneconomical. A national market covers an entire country; this becomes possible when the product can be transported, stored, and marketed at scale without losing its usefulness, as with branded packaged food products sold across India through a national distribution network. An international (or world) market extends across countries, typically for standardised commodities or services with genuinely global demand and established trade channels, such as crude oil, which is bought and sold by countries and companies around the world through established international trading arrangements.

Students often give an example without explaining WHY it belongs to that category (perishability/transportability for local; standardisation and distribution network for national/international) — always link the example back to the underlying reason for its classification.