Question

Explain the classification of market on the basis of time.

Hint:

The short-run is a period where some factors are fixed, while in the long run all factors can be adjusted by firms.

Answer 1

Step 1: Define Market.
A market is a place where buyers and sellers interact to exchange goods and services. Markets can be classified in various ways, including according to time.

Step 2: Classification of Market on the Basis of Time.
1. **Short-run Market**: In the short-run, some factors of production are fixed, and firms can only adjust variable factors like labor. Prices and quantities in the market can change, but not drastically.
2. **Long-run Market**: In the long run, all factors of production are variable, and firms can adjust all inputs. The long run allows firms to enter or exit the market, and prices and output levels adjust fully to market conditions.

Final Answer: \[ \boxed{Markets \; are \; classified \; into \; short-run \; and \; long-run, \; based \; on \; the \; flexibility \; of \; factors \; of \; production.} \]