Question

why a manufacturer may purchase finished goods as well as raw materials.

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Answer 1

Answer:

excess demand

Explanation:

 excess demand is greater than supply and there are shortages in the market

Answer 2

PURCHASE OF RAW MATERIALS AND FINISHED GOODS

• Any business firm has its interest and they decide the goods or services that may deal in and carry their operations further on.
• There is a probability that these goods or services may be produced first and then sold or may be outsourced as final products and sold further.
• The main interest of business is to generate more and more revenue to maximize profits. If the business firm is buying the final goods from somewhere and further dealing with it with customers then the purpose behind is to maximize the revenue generation. There may be a case of high demand so the producer needs to increase the demand that the firm may not be able to fulfill so they buy products from outside.
• On the other hand, raw materials are the finished goods bought by the producing company that is used by it to further help them conduct their operations.

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