CMA Foundation · Fundamentals of Business Economics and Management · Forms of Market
Classifying markets by time, the market where supply of a commodity is fixed for the day and price depends mainly on demand, as with fresh vegetables brought to a morning mandi, is called the:
This is the market period or very short period market. Supply is fixed because the vegetables are already brought to the mandi and cannot be increased that day, so the price depends mainly on demand conditions rather than on production adjustments.
- ALong-period market
- BMarket period (very short period) marketCorrect
- CShort-period market
- DSecular period market
Explanation
In the market period, supply cannot be changed because output is already produced, so price is determined mainly by demand. In short and long periods, supply can be adjusted through variable or all factors. Hence vegetables in a single morning fall under the market period.
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