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A market is an organized, voluntary exchange of commodities (including resources, goods and services) among buyers and sellers, during a given time period.

There are two sides to a market; the supply and the demand side. Demand is the term used for those who want a commodity and supply is the term for those who have the commodity. There are four main characteristics of a market:

1. Voluntary
   Trade among those who want a commodity and those who have that commodity. Market exchanges occur when both buyers and sellers are willing and able to conduct a trade.
2. Quantity
   Commodities most commonly traded by markets are goods and services that people consume and the resources used to produce these goods and services. The term quantity is used to specify the amount of a commodity traded.
3. Price
   Markets are actually the simultaneous trading of two items. For most markets, one of the items traded is money, in other words; buyers purchase a commodity by giving up money. Alternatively, sellers sell a commodity and receive money. The term price is used to specify the amount of money traded for a commodity.
4. Market differences
   Markets come in many shapes and sizes, some operate with formal rules and procedures (like the stock exchange), while others are informal (like a Sunday market). Some have only a few buyers or sellers, others have millions. Some are confined to a small geographical area, while others are world wide.

Before talking more about markets, one need to understand the market structures which are divided into four main markets.

1. Perfect competition
   An ideal, though many would argue it to be unrealistic, market structure characterised by a large number of small firms, identical products are sold by all firms, there are no barriers to entry (more about these later) and everyone has perfect knowledge of prices and technology. Perfect competition is an idealized market structure that's not observed in the real world. While unrealistic, it does provide an excellent benchmark that can be used to analyze the real world market structures. In particular, perfect competition efficiently allocates all available resources.
   The closest real world example: Coffee or tea sold on the world market.
2. Monopolistic competition
   A monopolistic market is characterized by a large number of small firms with similar, but not identical, products or services sold by all firms. This gives relative freedom of entry into and exit out of the industry, and extensive knowledge of prices and technology. Although monopolistic competition is very much alike perfect competition, the monopolistic competition market structure can be thought of as more similar to the real world economy's sibling. Almost perfect competition, but not quite.
   The closest real world example: Mineral water or soda, like Coca Cola or Pepsi.
3. Oligopoly
   An oligopoly market structure is a market that's dominated by a small number of firms, usually thought of as being three or more, selling either identical or differentiated products in a market with high barriers to entry.Oligopolistic industries are nothing, if not diverse. Some sell identical products, while other differentiated products. Some have three or four firms of nearly equal size, others have one large dominate firm that acts as a clear industry leader and a handful of smaller firms that follow the leader. Whatever products they might sell, and however they might be organised, oligopolistic industries share several behavioural tendencies such as:
   1. Interdependence
   2. Rigid prices
   3. Non-price competition (more about this later)
   4. Mergers
   5. Collusion

   In other words, each oligopolistic firm keeps a close eye on the decisions made by other firms in the industry -- interdependence. They are reluctant to change prices -- rigid prices -- but instead they try to attract the competitors customer using incentives other than prices -- non-price competition. When they get tired of competing with their competitors, they are inclined to cooperate either legally through mergers or illegally through collusion.
   The closest real world example: The software industry for computers.

4. Monopoly
   In a monopoly there is only a single seller of an entirely unique product with no close substitutes, a producer in a monopoly market structure has no competition and thus the demand for a monopoly firm's output is equal to the market demand for that good or service. This gives the firm extensive market control -- the ability to control the price and/or quantity supplied onto the market -- making a monopoly firm a price maker (as opposed to a price taker). However, while a monopoly can control the market price, it can not charge more than the maximum demand price that buyers are willing to pay.
   The closest real world example: Pantone, who owns the colour codes used by virtually every design company in the world.

There are two other types of market structures, however these are not referred to very often and it'll probably suffice just to have heard of them.

1. Monopsony
   A market characterized by a single buyer of a product. Monopsony is the buying-side equivalent of a selling-side monopoly. Much as monopoly is the only seller in the market, monopsony is the only buyer. While monopsony could be analysed for any type of market it tends to be most relevant for factor markets in which a single firm is the only buyer of a factor.
2. Oligopsony
   A market structure dominated by a small number of large buyers controlling the buying-side of a market. Oligopsony is the somewhat obscure and seldom discussed buying counterpart to an oligopoly seller that controls the selling side of a market. Whereas oligopoly is the most relevant to product markets, oligopsony is most relevant to factor markets.

Barriers to entry
Barriers to entry are just that; obstacles, be it either institutional; government; technological; or economic that acts as restrictions on entry of firms into a market or industry. The four primary barriers to entry are: resource ownership, patents and copyrights, government restrictions, and start-up costs. Barriers to entry are a key reason for market control and the inefficiency that this generates. In particular, monopoly, oligopoly, monopsony and oligopsony (more about these later) often owe their market control to assorted barriers to entry. By way of contrast, perfect competition, monopolistic competition and monopsonistic comptetition have few if any barriers to entry and thus little or no market control.

Non-price competition
This is a method of competition undertaken by firms in the same market, typically oligopoly firms, that involves advertising, brand-name promotion, support services, illegal activities and everything but the price. Oligopoly firms are quite prone to non-price competition du to the interdependenc, especially such as that illustrated by the kinked-demand curve. Because oligopoly firms find difficulty competing through prices, they seek out alternative methods of competition, such as advertising or even sabotage.