What is a market in economics?

A market is any place where two or more parties can meet to engage in an economic transaction—even those that don't involve legal tender. A market transaction may include goods, services, information, currency, or any combination that passes from one party to another. In short, markets are arenas in which buyers and sellers can gather and interact.

What is an example of a market?

Internet-based stores and auction sites such as Amazon and eBay are examples of markets where transactions can occur entirely online, and the parties involved never physically connect. Markets may emerge organically or as a means of enabling ownership rights over goods, services, and information.

How does a market work?

While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labour power) to buyers in exchange for money. It can be said that a market is the process by which the prices of goods and services are established.