Theory question 101
Introduction to CommerceCommerce 2 (answer five questions)
(a) What is Commerce?
(b) State and explain the importance of any five ancillary services to trade
Show the model answer
(a) Commerce is all the activities involved in buying and selling goods and services (trade) and the services that help trade (aids to trade) to get goods from producers to consumers.
(b) Any five, each named and explained:
Transport – moves goods from where they are produced to where they are needed (place utility).
Warehousing – stores goods until they are needed, so production can run ahead of demand (time utility) and prices stay steady.
Insurance – covers traders against risks such as fire, theft and accidents, so they can trade with confidence.
Banking/finance – provides loans, overdrafts and safe means of payment such as cheques.
Advertising – informs buyers about goods and persuades them to buy, increasing sales.
Communication – lets buyers and sellers exchange information quickly (telephone, post, internet).
Define commerce in one clear sentence, then explain how each aid removes a hindrance to trade.