Q.What is meant by 'market' in economics? How does this meaning differ from the everyday use of the word?

In economics, a market does not have to be a physical place — it only needs buyers and sellers who can interact so that a price gets determined.

In everyday language, a 'market' usually means a specific physical place — a vegetable market, a cloth market, a weekly village market — where buyers and sellers gather face to face to exchange goods.

In economics, however, the word has a wider and more technical meaning. A market is any set of arrangements that brings the buyers and sellers of a commodity into effective contact, so that a price can be determined through the interaction of demand and supply — physical proximity is not required. A national stock exchange (where buyers and sellers of shares never meet), an online retail platform, and even the international market for crude oil are all 'markets' in this economic sense, because in each of them a single ruling price emerges from demand and supply, even though there is no single physical marketplace.

The key economic criterion for calling something a market, therefore, is not a common location but a common price — if buyers and sellers of a commodity, wherever they are, end up trading at (or very close to) one ruling price, economists say a market exists for that commodity.

Students often assume a market must be a physical location; in economics, what matters is that a single price is determined through demand-supply interaction, not proximity.