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Difficulty: HardFunctions and Importance of Commerce

In commercial operations, warehousing primarily creates place utility by shifting commodities to high-demand locations, whereas transportation creates time utility by storing goods until market demand arises.

Answer: Answer

Answer

The statement is False. Transportation creates place utility by moving goods to where they are needed, while warehousing creates time utility by storing goods until they are demanded.
The statement is false because it reverses the specific types of utility generated by auxiliaries to trade. Transportation is responsible for creating place utility by moving products, whereas warehousing creates time utility by keeping products stored safely until required.

Step-by-Step Solution

1
Analyze the commercial function of transportation
Transportation physically moves goods from production centers to consumption points, thereby creating place utility by resolving spatial gaps.
To verify which form of utility is created by transporting commodities.
2
Analyze the commercial function of warehousing
Warehousing holds and preserves goods from the time of production until they are needed by buyers, creating time utility by resolving temporal gaps.
To verify which form of utility is created by storing commodities.
3
Evaluate the accuracy of the stem's assertions
The statement incorrectly interchanges the definitions, assigning place utility to warehousing and time utility to transportation.
To arrive at the final evaluation of the statement.

Key Concept

Types of Economic Utilities Created by Auxiliaries to Trade
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Topics

Functions and Importance of Commerce

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