Question

Which of the following statements is true regarding merchant middlemen?

1) They represent the best interests of a manufacturer.
2) They can be controlled better than agent middlemen.
3) They assume trading risks.
4) They work on commission and arrange for sales in the foreign country.
5) They do not take title to manufacturers' goods.

Answer 1

The true statement about merchant middlemen is that they assume trading risks, as they buy and sell goods at a markup and take on the associated risks.

Step-by-step explanation:

The true statement regarding merchant middlemen is that they assume trading risks. Merchant middlemen, unlike agent middlemen who work primarily on commission, take title to manufacturers' goods, purchasing them outright, and then selling them at a markup. This practice inherently means that merchant middlemen shoulder the risks associated with purchasing and reselling the goods, such as the risk of unsold inventory or price fluctuations in the market.

The true statement regarding merchant middlemen is that they assume trading risks.

Merchant middlemen are individuals or entities that facilitate the distribution of goods between manufacturers and consumers.

They often take on the risk involved in buying and selling goods, meaning that if the goods do not sell or if there are any losses, they are responsible for bearing those losses.