Page 225 - SST Class 07

Fixed versus Flexible Price MARKETS AND EQUALITY

Most shops sell things at a fixed price. But, there Since, markets are a platform for buying and
are shops where you can bargain and bring the selling, more demand for goods and hence more
price of goods down. Can you give two examples sales would boost the production and the oppor-
for this? tunities for people to earn. The characteristics of
In the case of fixed price, the seller charges the sellers and buyers of a small shop and big malls
same price for a product from all customers. are as follows :
What are the advantages of this? It builds cus- Sellers : There is a difference between the small
tomer confidence in the seller. It also helps both shop owners we see in the weekly market and
the buyer and the seller as they need not waste the ones in a big shopping complex. The former
time bargaining. People with weak bargaining is a small trader with little money whereas the
power prefer fixed prices. latter is very rich and can spend a huge amount
In the case of flexible price, the seller sells similar of money to set up the shop. The difference in
quantities to different buyers at different prices. their earnings is also substantial.
The final price is determined by bargaining. Buyers : The buyers of the weekly market
What are the advantages of this? People with cannot afford even the cheapest of goods,
good bargaining power can gain from this whereas the buyers visiting the malls are able to
practice. afford the branded goods and other luxury items
on sale there.
Terminology

Negotiating : to find a way over or through
Barriers : a fence or other obstacle that prevents movement or access
Cost-effective : effective or productive in relation to its cost
Retailers : any individual who operates their business
Substantial : of considerable importance, size or worth

Inside Story
Inside Story
g Market is a place where the goods are offered by the sellers in exchange for money from
buyers.

g Markets establish a link between producers and consumers through traders.
g Marketing helps in improving people’s standard of living by offering a wide variety of goods
and services.
g When the producers sell their goods directly to the consumers, it is called the direct
channel.
g In the case of fixed price, the seller charges the same price for a product from all customers.
g When the producers sell their goods to consumers through middlemen, it is called the
indirect channel
g In wholesale business, the wholesaler gives more emphasis on the quantity of goods, not
on the quality.
g Retail trade refers to buying of goods from wholesalers or manufacturers and selling them
directly to consumers.

Social Science-7 225