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Question
State Whether the Following Statement Are True Or False (Give Reason)
The consumer protection act was passed in the interest of the consumers.
Solution
The above statement is True.
The following points emphasise the importance of consumer protection:
- Seller dominant market: If the market is dominated by sellers then the consumer's choice, as well as his welfare, gets the last preference. All the transactions are finalized in favour of sellers, middlemen and manufacturers. E.g. if there is a shortage of goods then the buyer will have to buy a product at the price quoted by the seller.
- Ignorance of consumers: Ignorance of consumers about their rights, market conditions, price levels, product details, etc. result in consumer exploitation. Many times consumers do not even realize that they are being cheated. E.g. a shopkeeper may sell a product that is received by him as a free sample; gifts offered by the company may not reach the consumer.
- The tendency of the Consumers: The majority of the consumers get attracted towards the products of cheap prices, discounts, various schemes, etc. this weakness of the consumers leads to their exploitation without their knowledge.
- Unorganized Consumers: Consumers are neither organized nor united. Compared to them the producers and sellers are in a superior position. An individual consumer cannot fight against powerful traders. Thus, it is easy to exploit unorganized and widely spread consumers.
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