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JAMB Economics 1990 Question 22

Question 22

Distributive Trade

In the distribution channels for goods and services, the middleman's mark-up margin provides a rough measure for the

  1. A.quantity discounts allowed final consumers
  2. B.reward for business entrepreneurship
  3. C.effectiveness of government control over the economy's marketing channels
  4. D.extent of exploitation of the final consumer
Show the answer and explanation

Answer: B (reward for business entrepreneurship)

Explanation

The mark-up is the difference between the middleman's buying and selling prices; it pays him for his services and risk, so it measures his reward.