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What is Market definition/concept/elaboration

The term market refers to the area where economic transactions are carried out, that is, an exchange of goods and services between individuals, companies or any other type of organization. The existence of the market is of great importance in the development of the economy, society and institutions, in addition to being the main economic activity of man. In fact, an individual alone is unable to meet his needs, so he interacts with others in order to share what he has in abundance for what he lacks.

Classical economics distinguishes between two types of circumstances for markets: the perfectly competitive and the imperfect. Perfectly competitive markets are those in which the number of offers makes it impossible for just one of them to interfere in the price of goods and services traded, it goes without saying that this circumstance is ideal from this point of view. On the other hand, an imperfectly competitive market is one in which there are oligopolies or a reduced number of goods and services. In this case, they are price-setters because they have no competition .

Joseph Schumpeter was the one who had an interesting insight into the existence of many or few sellers in a given market for goods and services. According to this economist, a situation of few suppliers of goods and services should not be understood as an anomaly or harmful situation. On the contrary, it would be a natural situation that advances the economic system . In fact, companies produce innovations to gain an advantage in relation to other competitors, making their good or service unique and thus increasing their income. These innovations must be understood as true technical revolutions that can change society as they considerably reduce costs or generate some kind of extraordinary benefit. Over time, the competition gets access to this technology or innovation and starts to compete again.

Currently, studies on the functioning of the market are still in force, although economics is an inexact science, there are always several possible interpretations.

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