Understanding

Markets Class 7

1. Introduction

2. What is a Market? Markets are places where people buy and

sell goods and services.

A market is a place where buyers and sellers Goods include vegetables, clothes, and
exchange goods and services. electronics, while services include tailoring.

It is called bazaar, haat in Hindi, or Adam Smith said markets bring prosperity
märukatté in Kannada, depending on the by meeting people’s needs.
region.
Markets connect people with goods they
Markets can be physical, like weekly haats, cannot produce themselves.
or online, like shopping apps.
The chapter explores what markets are,
Physical markets include street vendors, their role in life, government’s role, and how
local shops, and multi-storey malls. consumers check quality.

Online markets allow transactions from Markets link economic activities like
anywhere using websites or mobile apps. farming, manufacturing, and services.

Markets provide goods like groceries, Understanding markets helps students see
clothes, and electronics, and services like how daily needs are met.
online classes.

**Key Features of Markets**:

3. Historical Example: Hampi
Bazaar
Every market has buyers who need goods
and sellers who provide them.
The Hampi Bazaar in Karnataka was a
Buyers and sellers agree on a price to thriving market in the 16th-century
complete a transaction. Vijayanagara Empire.

Price is the amount a buyer pays and a Located opposite the Virupaksha temple, it
seller accepts for goods or services. was a centre of flourishing trade.

Negotiation and bargaining often happen to Portuguese traveller Domingos Paes called
reach a mutually agreeable price. Hampi “the best-provided city in the world.”

In some markets, like supermarkets, The bazaar sold grains, seeds, milk, oil, silk,
negotiation is less common due to fixed animals like cows and horses, and birds.
prices.
Fernao Nuniz described craftsmen selling
Markets have existed for centuries, gold jewels, rubies, diamonds, pearls, and
connecting people, traditions, and ideas. cotton cloths.

The market had abundant goods despite the

region’s barren landscape, showing its
4. Prices and Markets prosperity.

Hampi Bazaar connected traders, artisans,

and buyers, reflecting vibrant economic
Prices in markets are determined by the activity.
interaction of buyers and sellers.

Sellers set prices based on profit, but

buyers may find them too high.
5. Types of Markets
For example, a seller may ask ₹80 per kg for
guavas, but buyers offer a lower price.
**Physical and Online Markets**:
Negotiation helps buyers and sellers agree
on a fair price for the transaction.
Physical markets involve face-to-face
If the seller sets a very high price, buyers buying, like weekly haats or local shops.
may not buy, and the transaction fails.
They sell vegetables, handicrafts, street
If the price is too low, the seller may lose food, and services like salons.
profit and stop selling.
Malls are large physical markets with many
Over time, prices stabilize at a level stores under one roof.
suitable for both buyers and sellers.
Online markets use apps or websites,
The amount of goods supplied by sellers delivering goods like books or electronics.
and demanded by buyers sets the right
price.
Online transactions allow buyers and sellers
to connect from distant locations.
Prices may drop late at night in weekly
markets as sellers clear perishable stock.
Some services, like tailoring, require
physical markets due to in-person needs.
Garment stores discount woollen clothes at
winter’s end to sell leftover inventory.
**Domestic and International Markets**:

6. Example: Surat Textile Market Domestic markets involve trade within a

country’s boundaries, like paper for books.

International markets involve exports

Surat, Gujarat, is Asia’s oldest textile (selling abroad) and imports (buying from
market and a global textile hub. abroad).

It has thousands of factories producing

India exports software to North America,
cotton and synthetic textiles.
chemicals to South America, and machinery
to Europe.
Raw cotton comes from mandis in
Maharashtra and Gujarat for processing.
India imports vegetable oils from Malaysia,
aircraft from North America, and diamonds
Cotton is woven, dyed, and turned into from Africa.
sarees or ready-made garments.

Each stage has markets for woven fabric, India was the world’s largest importer of
dyed fabric, and finished products. palm oil, sunflower oil, and soybean oil in
2024.
Wholesalers buy from manufacturers and
supply retailers across India and abroad. **Wholesale and Retail Markets**:

Wholesalers assess retail demand to

maintain stock and ensure steady supply. Wholesale markets sell large quantities
from producers to wholesalers.
Surat’s diamond industry, with 1.5 million
artisans, also thrives due to trade. Wholesalers store goods in warehouses or
cold storage for perishables like vegetables.
Ports, highways, and railways in Surat
support its role as a trading hub. Mandis are wholesale markets for grains,
vegetables, spices, or electronics.

Retail markets sell smaller quantities to

final consumers through shops or salons.

Retailers make goods and services

accessible to households for daily use.

Distributors bridge wholesalers and

retailers, especially in remote areas.

**Online Market Distribution**:

Online markets use aggregators, businesses

that sell through apps or websites.

Manufacturers send bulk goods to

aggregators’ warehouses.

Consumers buy online, and aggregators

pack and deliver the products.

**Other Markets**:

Stock markets trade shares, not goods, and

are explored later in studies.

Specialized markets, like Surat’s textile

market, focus on specific goods.

7. Role of Markets in People’s

Lives

8. Government’s Role in Markets

**Economic Role**:

**Controlling Prices**:
Markets connect producers and consumers,
providing goods and services.

The government sets price limits to protect

They help people access essentials like rice,
buyers and sellers.
clothes, or electronics they cannot produce.

Maximum prices on lifesaving drugs ensure

Markets support businesses by supplying
affordability for consumers.
inputs, like cotton for Surat’s textiles.

Minimum prices for crops like wheat and

Without markets, farmers could not sell
maize protect farmers from losses.
crops, and consumers would lack goods.

Minimum wages ensure fair pay for workers, **Social and Cultural Role**:
preventing exploitation.

Price controls must balance producer

Markets bring people together, fostering
incentives and consumer affordability.
interactions and shared traditions.
**Ensuring Quality and Safety**:
Long-term relationships form between
buyers and sellers, like with grocers or
tailors.
The government enforces quality and safety
standards for goods and services.
Some families settle grocer accounts
monthly, showing trust across generations.
Pharmaceutical companies follow strict
approval processes for medicines.
In South India, haldi and kumkum sellers give
free samples as a gesture of goodwill.
Sample testing ensures drugs are safe and
effective for consumers.
Markets like Ima Keithal in Manipur, run by
3,000 women, blend culture and economy.
The government monitors weights and
measures to verify packaged product
quantities. Ima Keithal sells vegetables, Manipuri
attire, and handicrafts, uniting communities.

Kautilya’s Arthaśhāstra required extra ghee **Challenges for Sellers**:

to compensate for measurement losses.

**Mitigating External Effects**:

Some goods, like artwork, lack a ready
market, making sales difficult.

Markets can cause harm, like pollution from

Artists struggle to find buyers and set fair
factories or single-use plastics.
prices for unique products.

The government regulates such effects to

Online platforms and word-of-mouth help
protect health and the environment.
artists reach buyers today.

Strict rules limit pollution and ban harmful **Consumer Benefits**:

products to ensure safety.

**Providing Public Goods**:

Markets respond to consumer demand, like
producing energy-efficient refrigerators.

Some goods, like roads, parks, and policing,

This benefits society by saving electricity
are not profitable for producers.
and reducing environmental impact.

The government provides these public

goods for all citizens’ benefit.
9. How Consumers Assess Quality
Public goods are accessible to everyone
without reducing future availability.

**Balancing Regulation**: **Government Certifications**:

Government rules ensure fair markets and Certifications help consumers verify the
protect consumers from exploitation. quality of goods and services.

Too many rules can hinder market The FSSAI logo on food packets confirms
efficiency, requiring careful regulation. safety for consumption.

The ISI Mark, issued by the Bureau of Indian

Standards, ensures quality for appliances
and materials.
visit mindmapstudy.com for more 
AGMARK certifies agricultural products like
vegetables, pulses, and spices.

BEE Star ratings on electronics show energy

efficiency, with more stars meaning less
electricity use.

These certifications confirm products meet

minimum safety and quality standards.

**Reputation and Feedback**:

Consumers rely on a product’s reputation,

built through word-of-mouth.

Family or friends’ recommendations

influence buying decisions.

Online reviews and feedback help assess

products on shopping apps.

Reviews provide insights into quality,

helping consumers choose wisely.

**Personal Assessment**:

Consumers check qualities like price,

durability, or appearance before buying.

For example, buying marbles involves

checking size, strength, and color.

For packaged goods like gram flour,

consumers look for certification logos.