CLASS-VII-SOCIAL SCIENCE PART-I LESSON: 12 UNDERSTANDING MARKETS

 

CLASS-VII-SOCIAL SCIENCE PART-I

LESSON: 12

UNDERSTANDING MARKETS

 

 

1. Introduction to Markets

v Meaning of a Market

Ø A place where people buy and sell goods and services is called as market. It is also known as bazaar, haat (in Hindi), and mārukatté (Kannada).

Ø A market can be a physical place or an online platform.

Ø Markets help individuals, households and businesses access goods and services.

Ø Markets connect people, traditions, and ideas.

v Historical Example – Hampi Bazaar

Ø The Hampi Bazaar in Karnataka was a prosperous market during the Vijayanagara Empire (1336-1565)

Ø It was located opposite the Virupaksha Temple.

Ø Foreign travellers of Portuguese like Domingos Paes and Fernao Nuniz described its prosperity.

Ø A wide variety of goods such as grains, silk, animals, jewels and precious stones were traded there.

Ø The bazaar reflected the economic strength of the empire.

2. Features of a Market

v Buyers and Sellers

Ø Every market has buyers and sellers.

Ø Buyers demand goods and services.

Ø Sellers supply goods and services.

v Price

Ø Price is the amount at which a buyer is willing to buy and a seller is willing to sell a product.

Ø Price plays an important role in completing transactions.

Ø Buyers and sellers often negotiate to reach an acceptable price.

v Negotiation and Bargaining

Ø Bargaining is common in weekly markets and street markets.

Ø In fixed-price shops and supermarkets, bargaining is less common.

Ø Online markets usually have fixed prices.

3. Determination of Price

v Role of Demand and Supply

Ø Demand is the quantity of a product that consumers are willing and able to buy at a given price.

Ø Supply is the quantity of a product that sellers are willing and able to sell at a given price.

Ø Prices are determined by the interaction between demand and supply.

v High Price Scenario

Ø If the seller fixes a very high price, buyers may refuse to buy the product.

Ø Unsold goods may remain with the seller.

v Low Price Scenario

Ø If the seller fixes a very low price, demand may increase rapidly.

Ø The seller may incur losses due to lower profit margins.

v Equilibrium Price

Ø Over time, a mutually agreeable price is determined.

Ø This price is neither too high for buyers nor too low for sellers.

4. Types of Markets

v Physical Markets

Ø Physical markets require the physical presence of buyers and sellers.

Ø Weekly markets, haats, local markets and malls are examples.

Ø Goods are exchanged directly in such markets.

v Online Markets

Ø Online markets allow buyers and sellers to transact virtually.

Ø Shopping apps and websites are examples of online markets.

Ø Goods are delivered to consumers’ homes.

Ø Payments are made digitally.

v Domestic Markets

Ø Domestic markets operate within the geographical boundaries of a country.

Ø Goods and services are bought and sold within the country.

v International Markets

Ø International markets involve trade across national boundaries.

Ø Import refers to buying goods from another country.

Ø Export refers to selling goods to another country.

Ø India imports crude oil and vegetable oils.

Ø India exports pharmaceuticals, engineering goods and petroleum products.

v Stock or Share Market

Ø There are other types of markets that do not transact goods and services. One of them is the share or stock market.

5. Wholesale and Retail Markets

v Wholesalers

Ø Wholesalers buy goods in large quantities from producers.

Ø Goods are stored in warehouses or cold storage facilities.

Ø Wholesalers supply goods to retailers.

v Retailers

Ø Retailers sell goods directly to final consumers.

Ø Retailers sell in small quantities.

Ø Examples include grocery stores, garment shops and salons.

v Distributors

Ø Distributors supply goods from manufacturers to retailers.

Ø They help bridge gaps caused by distance and transport challenges.

v Aggregators in Online Markets

Ø Aggregators are businesses that combine products from multiple sellers on a single platform.

Ø They store goods in warehouses and deliver them to consumers.

6. Case Study

v Surat Textile Market

Ø Surat is known as a textile hub of India.

Ø Raw cotton is supplied from nearby states and districts.

Ø Cotton is processed through weaving and dyeing units.

Ø Finished products are sold in wholesale markets.

Ø Wholesalers distribute products across India and internationally.

Ø Infrastructure such as ports, roads and railways support trade.

7. Role of Markets in People’s Lives

v Economic Role

Ø Markets facilitate exchange between producers and consumers.

Ø Markets provide employment and income opportunities.

Ø Markets help producers understand consumer preferences.

v Social Role

Ø Markets promote interaction among people.

Ø Relationships between buyers and sellers may last generations.

Ø Markets act as centres for cultural exchange.

v Example – Ima Keithal (Mothers Market in Meitei), Manipur

Ø Ima Keithal is a unique women-run market in Imphal.

Ø Approximately 3000 women manage the market.

Ø The market provides employment and supports local culture.

8. Government’s Role in Markets

v Price Control

Ø The government sets maximum prices for essential goods like medicines.

Ø The government sets minimum support prices for agricultural products.

Ø The government fixes minimum wages for workers.

v Ensuring Quality Standards

Ø The government ensures products meet safety standards.

Ø Medicines are tested before approval.

Ø The government monitors weights and measures.

v Reducing Negative Effects

Ø The government regulates industries that pollute the environment.

Ø Restrictions may be imposed on harmful products such as single-use plastics.

v Providing Public Goods

Ø Public goods such as roads, parks and policing are provided by the government.

Ø Public goods: Service or commodity that is accessible or available to all members of a society. Their present use does not diminish their availability for future use.

Ø Public goods are accessible to all members of society.

9. Assessing Quality of Goods

v Information on Product Labels

Ø Product labels contain details such as net quantity and manufacturing date.

Ø Labels include maximum retail price and ingredients list.

Ø Labels provide consumer protection information.

v Certification Marks

Ø FSSAI (Food Safety & Standards Authority of India) mark ensures food safety standards.

Ø ISI (Indian Standards Institution) mark ensures quality of industrial and electrical products. ISI Mark is issued by Bureau of India Standards (BIS).

Ø AGMARK certifies agricultural products.

Ø BEE (Bureau of Energy Efficiency) Star rating indicates energy efficiency of appliances.

v Role of Reviews and Reputation

Ø Consumers rely on brand reputation.

Ø Word-of-mouth recommendations influence buying decisions.

Ø Online reviews help consumers make informed choices.

v Summary of the Lesson

Ø A market is a place where buyers and sellers exchange goods and services.

Ø Price is determined through interaction of demand and supply.

Ø Markets can be physical, online, domestic or international.

Ø Wholesalers, retailers, distributors and aggregators play important roles in supply chains.

Ø Markets contribute to economic growth and social interaction.

Ø The government regulates markets to ensure fairness and safety.

Ø Certification marks help consumers assess product quality.

Ø Markets are essential for meeting the needs and wants of people.