The definition of a market is by no means simple(Tirole, 1988). Markets are spaces where sellers and buyers exchange goods or services in return for a monetary payment (Belleflamme & Peitz, 2015). This space may be physical or virtual.There are different configurations of markets. For instance, spaces with a small number of sellers(oligopoly) with marketpower to set the price. The contrary situation is also possible where a small number of buyersface a large number of sellers.Public procurement of goods and servicesis a good exampleforthis type of markets.We should not forget situations in which buyersare not the final consumers, retailersfor example(Belleflamme & Peitz, 2015).What is more, markets may exchange homogeneous or differentiatedgoods. Homogenous goods are typically considered as perfect substitutes because final consumers cannot distinguish the differences between two goods supplied in the market. On the other hand, differentiation allows consumers to find alternatives.
References
Tirole, J. (1988). The theory of industrial organization. MIT press.
Belleflamme, P., & Peitz, M. (2015). Industrial organization: markets and strategies. Cambridge University Press.