PRODUCTION, COMMERCE AND CONSUMPTION

 PRODUCTION, COMMERCE AND CONSUMPTION

-Production, commerce and consumption are three main parts of one continuous chain of events whose aim is to satisfy human wants.

-Commerce is a part of production. Goods produced may be produced to consumers only after they have been manufactured or put in a form in which they can be consumed.

-Production process is not complete until the goods produced have reached the people who actually want them i.e. consumers.

-Without commerce, goods and services would not reach the final consumers.

-Producers and consumers are connected by commerce, therefore commerce is a linkman.

-The concern of commerce is therefore to bridge the gape between the producer and consumer. The main function of commerce is to link up and make smooth the passage of goods and services from producers to the consumers.

-Consumption is the final productive process of satisfying the human wants by using up the utilities created by production and commerce.

-In this broader meaning of production, commercial activities, direct services and

Industry form part of production.

-PRODUCTION↔COMMERCE↔CONSUMPTION

DIFFERENCE BETWEEN COMMERCE AND PRODUCTION

-Production consists of all production activities i.e. industry, commerce and direct services while commerce consists of all distributive occupations including trade and aids to trade.

-Production creates in specific form utility and other types of utilities while commerce in specific creates time, place and possession utilities in goods.

SIMILARITIES OF COMMERCE AND PRODUCTION

-Both commerce and production are economic activities aiming at satisfying human wants.

-Both commerce and production, in modern economies aim at generating profit.