Question

Give arguments for and against wholesaler. Should the wholesalers be eliminated?​

Answer 1

Answer:

(a) Increase in Price : The unnecessary presence of wholesaler between producer and consumers increases the prices of the commodity for the consumers. If there is direct contact between producer and consumers, the price will be lesser.

(b) Monopoly in the distribution : The wholesaler purchases bulk of the product, sometime all the product of the manufacturer, stored in his godwon and practically he becomes the monopolist. Thus, he exploits the consumer by restricted supply of goods.

(c) Creating artificial scarcity : The wholesaler stores the bulk of the commodity in his godown blocks the flow of goods and creators artificial scarcity of goods which result in the rise of price.

Answer 2

Answer:

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The profit margin of the wholesaler increases the cost of the product and it adversely affects the ultimate consumer. Thus by eliminating him, the consumer will be benefited since he would be required to pay a less price for his purchases.