What are two important benefits provided by retailers?
A They provide value in the form of consumer utilities.
B They lower prices for consumers by eliminating unnecessary intermediaries.
C They ensure fair competition in consumer markets.
D They have a positive impact on the economy.
The correct answer and explanation is:
The correct answer is A: They provide value in the form of consumer utilities.
Retailers offer several benefits that directly impact consumers, with the two most significant being the provision of consumer utilities and the positive economic impact.
Consumer Utilities:
Retailers play a crucial role in providing consumer utilities, which refer to the value that consumers derive from the products or services they purchase. The five types of utility that retailers contribute to include:
- Form Utility: Retailers make products available in a ready-to-use format. For example, a grocery store provides fresh produce, pre-packaged and easy to purchase.
- Place Utility: Retailers provide access to goods in convenient locations. For instance, a retail chain ensures products are available at different outlets across various regions, making shopping accessible to a wide range of consumers.
- Time Utility: Retailers ensure that products are available at times that are convenient for consumers. This could include long business hours or 24/7 online stores that cater to different schedules.
- Possession Utility: Retailers facilitate the transfer of ownership from sellers to buyers. This includes offering payment methods such as credit cards or installment plans that ease the purchasing process.
- Service Utility: Many retailers provide customer services such as returns, exchanges, and advice, adding value beyond the product itself.
Economic Impact:
Retailers also have a positive impact on the economy. They create jobs and contribute to GDP by generating sales revenue. By maintaining an effective supply chain and engaging in local or international trade, retailers stimulate economic activity. Their role in bringing products to consumers encourages production, enhances market demand, and promotes the growth of industries. Additionally, they foster innovation and competition, helping improve product quality and reduce prices.
While other options, such as lowering prices or ensuring fair competition, can be beneficial, they are not as directly tied to the core role of retailers as the provision of consumer utilities and their economic contributions.