II. You are going to read the text about the market.

a) Brainstorm words connected with “ market”.

B) Consider the questions and be ready to answer them as soon as you read the text.

1. What is a market?

2. What do markets embrace?

3. How can a market be defined in terms of product?

4. How can a market be defined depending on transport costs, product characteristics and buyer tastes?

5. How can different transaction be conducted?

Markets

A market is an exchange mechanism that brings together sellers and buyers of a product, factor of production or financial security. Markets embrace a number of product, spatial and physical measurements. In terms of product, a market can be defined as consisting of a group of goods or services that are viewed as substitute products by buyers. Thus, from a buyer’s point of view, women’s shoes and men’s shoes would be represented as separate markets, that is, markets satisfying the needs of different buyers.

Spatially, a market may be local, regional, national or international in scope, depending on such considerations as transport costs, product characteristics and buyer tastes. For example, because of a high ratio of transport costs to value added, cement and plasterboard markets tend to be localized. Likewise, Bavarian beer meets a specialized regional taste, while Coca Cola, by contrast, is sold worldwide as a global brand.

Physically, seller and buyer exchanges may be transacted in a well-defined market place (for example, a local fish market or wool exchange) or in a much more amorphous way (for example, the buying and selling of stocks and shares by telephone through international dealing offices or the sale of goods on the Internet). Finally, in some markets, sellers deal directly with final buyers, as in case with telephone insurance and catalogue selling while in others transactions are conducted through a chain of intermediaries such as wholesalers and retailers, brokers and banks.

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