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Factors Affecting The Size Of A Market

The extension or size of a market is determined by several factors. More of the factors are related to the internal infrastructural matters of a country. They are having mixed characteristics of micro and macro economics. These factors are explained below :

Factors Affecting The Size Of A Market:

The extension or size of a market is determined by the following factors:

1. Transport facilities : The size of market depends on the nature of transport facilities existing in a country. If a country has all wealthier roads, it will be easy for the producers to distribute their goods. The greater the availability of transport facilities the larger will be the size of market.

2. Communications: The size of market also depends on the nature of communication facilities. If communications like Telephone, Telegraph and other postal amenities are provided at all places, the size of market will extend to a greater extent.

3. Standardization and grading : If the methods of standardization and grading are adopted in the processing of goods, then goods are bought and sold on the basis of the samples. The size of market will be larger if there are grading and sample facilities in the market.

4. Durability : Durability of goods is another important factor which determines the extent of the market. If the goods have durability, they get national and international market. For example gold, silver, diamonds etc., have international market.

5. Portability: If the commodities have less weight, they can be transported to any place within or outside the country. Commodities which are larger in size can be transported easily.

6. Credit Facilities : The nature lit credit facilities offered by banks and insurance institutions also determine the extent. of market.

7. Government’s Economic Policy: The size of market is also determined by the economic policies of the Government. If Government follows liberal policy for developing business and commerce, then the size of market will be large.

8. Law and Order situation: The size of market is also determined by the law and order situation in the country. If there exists political stability, the size of market will be greater.

9. Volume of demand: Volume of demand is another determinant of the size of market. If people’s demand for various goods is greater, then the size of market will be larger.

In this way the size of market is determined by several factors.

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