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A '''market''' is a system, institution, procedure, social relation, or infrastructure whereby parties engage in exchange. While markets may be distinguished by offering goods and services through the process of buying and selling, in modern [[capitalism|capitalist]] markets the vast majority of markets are based on [[laborer|laborers]] offering their [[labour|labor power]] for [[wage|wages]] to [[capitalist|capitalists]] in exchange for a [[wage]].<ref name="Marshall1890"/>

In a market, parties are engaged in the [[exchange of goods and services]]. The exchange may or may not use [[money]]. A market is thus a [[forum]] in which buyers and sellers interact, and [[price]]s emerge that coordinate production and consumption. Markets rely at least in part on [[supply and demand]], and are typically shaped by [[competition]] between sellers and buyers.<ref name="Mankiw2021"/>

Markets may be physical locations such as [[marketplace]]s, [[shopping malls]], or [[stock exchanges]], or they may be virtual such as [[e-commerce]] sites and [[online auction]]s. They may involve [[retail sale|retail]] sales to final consumers, [[wholesale]] trade between businesses, [[financial market]]s for [[capital (economics)|capital]] and [[derivative (finance)|derivatives]], [[labor market]]s, [[commodity market]]s, and [[black market]]s.<ref name="Varian2014"/>

==Etymology==
The word ''market'' comes from the Latin ''mercatus'' ("trade, place of merchandise"), derived from ''merx'' ("merchandise"). It entered English via the Old North French ''marchiet'' in the 12th century, originally referring to a periodical gathering of people for buying and selling goods.<ref name="OED"/>

==History==
Markets are as old as human [[trade]] itself. Archaeological evidence shows exchange networks stretching back to the [[Paleolithic]] era, and long-distance trade routes such as the [[Silk Road]] connected civilizations for millennia.<ref name="Davies2014"/>

===Ancient markets===
In [[Ancient Greece]], [[agora]]e served as central marketplaces and public spaces. In [[Ancient Rome]], the [[Forum Romanum]] functioned as a commercial and political center. Both civilizations developed sophisticated trade networks across the Mediterranean, using [[coin]]age as a medium of exchange.<ref name="Davies2014"/>

===Medieval markets===
During the [[Middle Ages]], European towns were granted the right to hold regular markets and [[trade fair]]s by royal charter. These periodic gatherings drew merchants from across regions and became the principal venues for long-distance trade. The [[Champagne fairs]] in medieval France, for example, were among the most important commercial events in Europe from the 12th to the 14th centuries.<ref name="Pounds1994"/>

===The rise of the market economy===
The transition from feudalism to capitalism in early modern Europe saw the gradual expansion of market exchange into spheres previously governed by custom or obligation. [[Karl Polanyi]] called this process the "[[Great Transformation]]"—the disembedding of the economy from social relations and the emergence of a self-regulating market system.<ref name="Polanyi1944"/>

The [[Industrial Revolution]] of the 18th and 19th centuries accelerated this transformation, as mass production, urbanization, and the spread of wage labor turned market exchange into the dominant organizing principle of economic life. By the 19th century, the idea of the [[free market]]—an economy governed by supply and demand without state intervention—had become a central ideological and political force.<ref name="Smith1776"/>

==Types of markets==
Markets take many forms. Economists and analysts classify them along several dimensions:

===By geography and scale===
* [[Local market]] – trade within a town or region (e.g., farmers' markets).
* [[Regional market]] – trade within a broader geographic area.
* [[National market]] – trade within a country.
* [[International market]] – cross-border trade.
* [[Global market]] – the integrated worldwide market for goods, services, and capital.<ref name="Mankiw2021"/>

===By product===
* [[Commodity market]] – trade in raw materials and primary products (e.g., [[wheat]], [[oil]], [[copper]]).
* [[Financial market]] – trade in [[stock]]s, [[bond (finance)|bond]]s, [[currency]], and [[derivative (finance)|derivatives]].
* [[Labor market]] – the exchange of [[laborer|labor power]] for [[wage]]s.
* [[Real estate market]] – trade in land and buildings.
* [[Service market]] – trade in intangible services such as education, healthcare, and entertainment.
* [[Consumer goods market]] – trade in finished products sold to households.<ref name="Varian2014"/>

===By structure===
Economists classify markets according to the degree of competition:
* [[Perfect competition]] – many buyers and sellers, identical products, no barriers to entry; all participants are [[price taker]]s.
* [[Monopolistic competition]] – many firms selling differentiated products.
* [[Oligopoly]] – a few large firms dominate the market.
* [[Monopoly]] – a single seller dominates the market.
* [[Oligopsony]] – a single or dominant buyer.<ref name="Pindyck2018"/>

===By legality===
* [[Official market]] – regulated and licensed.
* [[Grey market]] – trade through unofficial but not illegal channels.
* [[Black market]] – illegal trade in prohibited goods or trade that evades taxes and regulation.<ref name="Buchanan1987"/>

==Market structure and supply and demand==
The operation of a market is governed by [[supply and demand]]. The [[demand curve]] represents the quantity of a good that buyers are willing and able to purchase at various prices; the [[supply curve]] represents the quantity that sellers are willing to offer. The intersection of these curves determines the [[market equilibrium]] price and quantity.<ref name="Marshall1890"/>

When supply equals demand, the market is said to clear: there is no shortage or surplus. If demand increases (for example, due to rising incomes), the price rises, signaling producers to increase output. If supply increases (for example, due to technological improvements), the price falls, encouraging consumers to buy more. In this way, the price mechanism coordinates the independent decisions of millions of buyers and sellers without central direction.<ref name="Hayek1945"/>

==Market failure==
Despite their role as efficient coordinators, markets can fail to allocate resources optimally. [[Market failure]] occurs when the free market outcome is not [[Pareto efficiency|Pareto-efficient]]. Common causes include:
* [[Externality|Externalities]] – costs or benefits imposed on third parties (e.g., pollution).
* [[Public good]]s – goods that are underprovided by the market because they are non-excludable and non-rivalrous.
* [[Information asymmetry]] – when one party has better information than the other, potentially leading to [[adverse selection]] and [[moral hazard]].
* [[Market power]] – monopolies and oligopolies that restrict output and raise prices.
* [[Transaction cost]]s – the costs of negotiating and enforcing contracts, which can prevent mutually beneficial exchanges from occurring.<ref name="Stiglitz2015"/>

When markets fail, government intervention—through [[tax]]es, [[subsidies]], [[regulation]], or the direct provision of public goods—may improve outcomes. However, economists also recognize [[government failure]], where intervention itself may be inefficient or counterproductive.<ref name="Buchanan1987"/>

==Market forms==

===Physical markets===
Traditional physical markets—[[marketplace]]s, [[bazaar]]s, [[souks]], [[supermarkets]], and [[shopping mall]]s—remain the dominant form of retail exchange in much of the world. They range from open-air daily markets in developing countries to large enclosed shopping centers in advanced economies.<ref name="Davies2014"/>

===Financial markets===
[[Financial market]]s are where participants trade [[financial instrument|financial assets]] such as [[stock]]s, [[bond (finance)|bond]]s, [[currency|currencies]], and [[derivative (finance)|derivatives]]. Major [[stock exchange]]s include the [[New York Stock Exchange]] (NYSE), the [[NASDAQ]], the [[London Stock Exchange]], and the [[Shanghai Stock Exchange]]. Financial markets channel savings into investment and allow firms and governments to raise capital.<ref name="Mankiw2021"/>

===Online and electronic markets===
The [[Internet]] has given rise to electronic markets that operate without a central physical location. [[E-commerce]] platforms such as [[Amazon (company)|Amazon]], [[Alibaba Group|Alibaba]], and [[eBay]] connect millions of buyers and sellers worldwide. [[Cryptocurrency]] and [[decentralized exchange]]s represent a more recent development, aiming to disintermediate financial transactions entirely.<ref name="Brynjolfsson2013"/>

===Labor markets===
[[Labor market]]s are where workers sell their [[laborer|labor power]] and employers buy it. Wages and employment levels are determined by the interaction of labor supply (workers' willingness to work at various wages) and labor demand (employers' willingness to hire). Labor markets are often imperfect: workers have different skills, employers have varying degrees of [[monopsony]] power, and institutions such as [[trade union]]s and [[minimum wage]] laws shape outcomes.<ref name="Boeri2013"/>

==Market socialism and alternative models==
The concept of a market is not exclusively tied to capitalism. In a [[market socialist]] economy, firms are owned or controlled by workers or the state but still compete in markets for goods and labor. The [[Socialist market economy|Chinese socialist market economy]] and the [[Yugoslav self-management]] system are historical examples. Proponents argue that markets can be combined with various forms of social ownership to achieve both efficiency and equity.<ref name="Heilbroner1999"/>

Conversely, [[planned economy|planned economies]] attempt to replace markets with central direction of production and distribution. The relative merits of markets versus planning have been central to economic debate since the [[socialist calculation debate]] of the 1920s and 1930s, in which [[Ludwig von Mises]] and [[Friedrich Hayek]] argued that rational economic calculation was impossible without market prices, while [[Oskar R. Lange|Oskar Lange]] and [[Abba P. Lerner]] proposed that central planners could simulate market outcomes.<ref name="Mises1920"/>

==See also==
* [[Supply and demand]]
* [[Price]]
* [[Competition]]
* [[Market failure]]
* [[Perfect competition]]
* [[Stock exchange]]
* [[Trade]]
* [[Capitalism]]

==References==
<references>
<ref name="Marshall1890">Marshall, Alfred (1890). ''Principles of Economics''. Macmillan.</ref>
<ref name="Mankiw2021">Mankiw, N. Gregory (2021). ''Principles of Economics'' (9th ed.). Cengage Learning. ISBN 978-0-357-13399-4.</ref>
<ref name="Varian2014">Varian, Hal R. (2014). ''Intermediate Microeconomics: A Modern Approach'' (9th ed.). W. W. Norton. ISBN 978-0-393-91920-0.</ref>
<ref name="OED">"Market". ''Oxford English Dictionary''. Oxford University Press.</ref>
<ref name="Davies2014">Davies, Norman (2014). ''Vanished Kingdoms: The History of Half-Forgotten Europe''. Penguin.</ref>
<ref name="Pounds1994">Pounds, Norman J. G. (1994). ''An Economic History of Medieval Europe''. Longman.</ref>
<ref name="Polanyi1944">Polanyi, Karl (1944). ''The Great Transformation: The Political and Economic Origins of Our Time''. Farrar & Rinehart.</ref>
<ref name="Smith1776">Smith, Adam (1776). ''An Inquiry into the Nature and Causes of the Wealth of Nations''. W. Strahan and T. Cadell.</ref>
<ref name="Pindyck2018">Pindyck, Robert S.; Rubinfeld, Daniel L. (2018). ''Microeconomics'' (9th ed.). Pearson. ISBN 978-0-13-418424-0.</ref>
<ref name="Hayek1945">Hayek, Friedrich A. (1945). "The Use of Knowledge in Society". ''American Economic Review'' 35 (4): 519–530.</ref>
<ref name="Stiglitz2015">Stiglitz, Joseph E.; Walsh, Carl E. (2015). ''Economics'' (4th ed.). W. W. Norton. ISBN 978-0-393-93462-3.</ref>
<ref name="Buchanan1987">Buchanan, James M. (1987). ''Economics: Between Predictive Science and Moral Philosophy''. Texas A&M University Press. ISBN 978-0-89096-340-2.</ref>
<ref name="Brynjolfsson2013">Brynjolfsson, Erik; McAfee, Andrew (2013). ''The Second Machine Age''. W. W. Norton. ISBN 978-0-393-23935-3.</ref>
<ref name="Boeri2013">Boeri, Tito; van Ours, Jan (2013). ''The Economics of Imperfect Labor Markets'' (2nd ed.). Princeton University Press. ISBN 978-0-691-15284-4.</ref>
<ref name="Heilbroner1999">Heilbroner, Robert L. (1999). ''The Worldly Philosophers'' (7th ed.). Simon & Schuster. ISBN 978-0-684-86214-9.</ref>
<ref name="Mises1920">Mises, Ludwig von (1920). "Economic Calculation in the Socialist Commonwealth". In ''Collective Economic Planning''. London: Routledge.</ref>
</references>

==External links==
* [https://www.britannica.com/topic/market-economics Encyclopædia Britannica – Market]
* [https://www.investopedia.com/terms/m/market.asp Investopedia – Market]
* [https://www.khanacademy.org/economics-finance.org/ap-macroeconomics Khan Academy – Markets]

Market - Revision history

Toto: Create English encyclopedia article on Market