Explain types of market on the basis of Area covered and on the basis of Time.

Answer: On the basis of area: local, national and international markets. On the basis of time: very short period, short period and long period markets.

A. On the basis of area covered

1. Local market: Buyers and sellers are from the same locality. Usually perishable goods like vegetables, milk and fish, and bulky goods like bricks and sand, have a local market.
2. National market: Goods are bought and sold throughout the country, e.g. wheat, rice, sugar, cloth.
3. International (world) market: Goods produced in one country are sold in other countries, e.g. gold, silver, petroleum, tea.

B. On the basis of time

1. Very short period market: Supply cannot be increased because goods are perishable, e.g. fruits, vegetables, milk. Price depends mainly on demand.
2. Short period market: Supply can be increased to some extent by using existing capacity more intensively, but plant size cannot be changed. Both demand and supply affect price.
3. Long period market: Supply can be fully adjusted to demand by changing plant size and inputs, e.g. durable goods. Price is determined by both demand and supply in the long run.