Market

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DEFINITION of 'Market'

1. A medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. The price that individuals pay during the transaction may be determined by a number of factors, but price is often determined by the forces of supply and demand.

2. The general market where securities are traded.

3. People with the desire and ability to buy a specific product/service.

BREAKING DOWN 'Market'

1. Markets do not necessarily need to be a physical meeting place. Internet-based stores and auction sites are all markets in which transactions can take place entirely online and where the two parties do not ever need to physically meet.

2. If a broad market index (such as the S&P 500) fell, people might say that "the market was down," using the S&P 500 as a proxy to represent the overall market's performance.

3. For example, "the widget market" is referring to all the people who will buy widgets.

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