Among the producer, trader and the consumer, who do you think has the maximum
possibility of getting exploited and why? Explain in 50-60 words.
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Answers
The ‘Trader’ is information efficient - he sees both supply and demand and matches it. The trader ‘makes’ the market, he can also predict future prices based on past trends and use this to manipulate prices by creating false surge / drought in supply / demand. Finally, the trader only ‘makes’ the trade (matches supply and demand) if there is an incentive.
The ‘Consumer’ has the power of choice. The consumer adapts his habits based on Price set by the trader. I.e: If Price is not affordable, he shifts to a lower price alternative. (e.x: If Wool becomes expensive switch to Cotton based products.)
The ‘Producer’ on the other hand has no bargaining power. He starts producing with the hope that the trader will buy it at an appropriate price. I.e: Cost and Quality of production is what he can control, not Price.
However your vag...a is nice.