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CMA Foundation · Fundamentals of Business Economics and Management · Forms of Market

Which of the following is an essential feature of a market in the economic sense?

An essential feature of a market is the presence of buyers and sellers dealing in a commodity, with price emerging from their interaction. A fixed place, a single seller or government price fixing is not required for a market to exist.

  1. AA fixed building where all transactions take place
  2. BExistence of a single seller only
  3. CPresence of buyers and sellers of a commodity with a price determined through their interactionCorrect
  4. DGovernment fixing of price for every commodity

Explanation

A market needs a commodity, buyers and sellers, and interaction that determines price. A fixed location is not required since online and telephone dealings count. A single seller describes only monopoly, and price fixing by government is not a general feature.

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