Question

Explain how a chain of markets is formed. What purpose does it serve?

Answer 1

Goods are produced in factories, Goods are also produced in farms and in homes. But we are not 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 final consumer. They first buy goods in bulk. Then 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 a great purpose. It maintains the flow of money. It makes easy availability of various items of our daily use. It also promotes coordination in society