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JAMB Economics 2001 Question 43

Question 43

Distributive Trade

The distribution channel that contributes most to the cost of production is

  1. A.producer–wholesaler–consumer
  2. B.producer–retailer–consumer
  3. C.producer–retailer–wholesaler–consumer
  4. D.producer–wholesaler–retailer–consumer
Show the answer and explanation

Answer: D (producer–wholesaler–retailer–consumer)

Explanation

The longest chain of middlemen (producer–wholesaler–retailer–consumer) adds the most handling costs and profit margins.