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JAMB Economics 2000 Question 37

Question 37

Distributive Trade

A major effect of a long distribution chain is

  1. A.high retail prices
  2. B.scarcity of commodities
  3. C.low retail prices
  4. D.low producer earnings.
Show the answer and explanation

Answer: A (high retail prices)

Explanation

Each middleman adds his profit, so the longer the chain, the higher the final price.