Q1. What is Classification of Business Activity.
- INDUSTRY: Industry refers to an activity which converts raw material into useful products. It includes all those processes by which goods are produced by application of human or mechanical power. Example-Cotton textile industry refers to all manufacturing units producing textile goods from cotton, goods produced by industry may be:
- Consumer Goods: These goods are meant for direct consumption by consumers. Example- Shoes, Clothes, T.V etc.
- Producer Goods: These goods are used in production of other goods. Example– Steel, Machines etc.
- COMMERCE: It refers to those activities which help directly or indirectly in distribution of goods to ultimate consumers. It aims to insure supply of goods at right place, in right quantity and at right time. Commerce ensures free and smooth exchange by removing hindrances or obstacles in way of exchange. The hindrances may be in respect of person, place, time, risk, finance and information.
Role or Functions of Commerce
- TRADE: Trade is essential part of commerce. It refers to sale, transfer or exchange of goods. It helps in making goods available to consumers. These days goods are produced on large scale and it is difficult for producers to reach buyer for sale of their product. Businessman are engaged in trading activities as middlemen to make goods available to consumers in different markets.