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Difficulty: EasyMeaning, Scope, and Characteristics of Commerce

Commerce is broadly divided into trade and aids to trade. Which of the following activities directly constitutes trade?

  1. Buying goods from a manufacturer to resell to consumersAnswer
  2. B
    Insuring goods against potential loss or damage during transit
  3. C
    Providing custom tailoring services directly to individual clients
  4. D
    Processing timber into wooden furniture in a factory

Answer

Buying goods from a manufacturer to resell to consumers
The activity of purchasing goods from a producer to resell to end consumers represents trade, which is the primary branch of commerce dealing with exchange.

Step-by-Step Solution

1
Identify the components of Commerce
Commerce consists of two main branches: Trade (buying and selling of goods and services) and Aids to Trade (support services like banking, transport, insurance, warehousing, and communication).
Understanding the scope of commerce requires distinguishing core exchange activities from supporting services.
2
Evaluate the activities in the given options
Purchasing goods for resale involves direct exchange (trade). Insurance is an auxiliary service, direct tailoring is a personal service, and furniture manufacturing is secondary production.
Only the purchase and resale of items directly represents trade.

Key Concept

Branches and Scope of Commerce (Trade vs. Auxiliaries to Trade)
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Topics

Meaning, Scope, and Characteristics of Commerce