Question

Explain how a chain of markets is formed. What purpose

does it serve?​

Answer 1

Answer: Goods are produced in factories, Goods are also produced in farms and in homes. But we are required to go to factories or farms to buy goods of our need Because the producers are not interested in selling us small quantities. The wholesale traders do this job. They are the people who come in between the producer and the consumer. They first buy good in bulk. They sell these goods to the retailers, who finally sell this to the consumers.

From the above instance, we come to the conclusion that from factories to final consumers a chain is formed, which we may call a chain of markets. We can better understand it through the flow chart given below.

It serves great purpose. It maintains flow of money. It makes easy availability of various items of our daily use. It also promotes co-ordination in society.

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Answer 2

A chain of markets is formedwhen a number of traders supply goods from the producers to the consumers. We thus have wholesalemarkets where other dealers buy the goods in bulk. These dealers then sell the goods in weekly markets to consumers and thus a chain of markets is formed.