Case-Based Questions: Internal Trade | Business Studies (BST) Class 11 - Commerce PDF Download

Carefully read the following case studies, which present real-world business scenarios, and answer the question(s) that follow each case to test your understanding and application of business studies concepts.

Case 1: Malti’s Vegetable and Retail Business
Malti was selling vegetables, going door to door in the local area in her cart along with her mother. Her father sells consumer items of daily use outside different temples of that locality at different places on fixed days. She doesn’t like the business of selling vegetables because of the short shelf life of vegetables and the very little profit. She told her father to take a loan and to open a small shop where all plastic items of daily use like jugs, baskets, thread-box, containers, etc., can be sold. Due to a lack of funds, her father could not take a shop on rent; rather, he decided to sell soft drinks, mouth fresheners, beetle leaf, etc., on a temporary platform with limited space at one of the crossings.

Q1: Identify the type of trade discussed above:
(a) Wholesale trade
(b) Retail trade
(c) Large scale business
(d) Online trade

Correct Answer: Option (b)

Retail trade is the business activity associated with the sale of goods to the final consumer, the ultimate customer. It is the link between wholesalers or manufacturers and the customers of the product. Typically, retailers sell goods in small quantities to consumers for personal use, not for resale or business use.

Q2: “... soft drinks, mouth freshener, beetle leaf, etc. on a temporary platform with limited space at one of the crossings. The type of retailer stated here is:
(a) Speciality stores
(b) Market traders
(c) Cheap jacks
(d) Street stall holders

Correct Answer: Option (d)
The markets or stalls which are practically immobile in the street are known as street stallholders. The merchants place a small stall or a shop to display their merchandise. They can be erected or taken down simply on wheels. They are commonly seen in fairs, conventions, exhibitions etc.

Q3: “She told her father to take a loan and to construct a small shop where all plastic items of daily use like jugs, baskets, thread-box, containers can be sold.” Specify the type of retailer indicated here:
(a) Single-line stores
(b) Street stall holders
(c) Speciality stores
(d) Cheap jacks

Correct Answer: Option (c)
A specialty store carries a deep assortment within a narrow line of goods. Furniture stores, florists, sporting goods stores, and bookstores are all specialty stores. Stores such as The Athlete's Foot (sports shoes only) and DXL Big + Tall.

Q4: “Malti was selling vegetables going door to door.” What kind of retailer is Malti?
(a) Fixed shop
(b) Street traders
(c) Hawkers
(d) Cheap jacks

Correct Answer: Option (c)
A hawker is a vendor of merchandise that can be easily transported; the term is roughly synonymous with costermonger or peddler. In most places where the term is used, a hawker sells inexpensive goods, handicrafts, or food items.

Case 2: Malti’s Sabjiwala Business
Malti often noticed that nuclear families where both husband and wife go to work find it difficult to cook as cleaning and cutting vegetables took a lot of time, so as an entrepreneur she started gathering information regularly and developed a new product line of selling chopped vegetables in hygienic packaging under the brand name ‘Sabjiwala’. She started her shop in her home space. In the beginning, she catered to the orders of customers directly, but later on, as demand increased, it was difficult for her to manage all the orders from that space. Her friends advised her to sell the products by opening her chain stores. This will increase her sales turnover and eventually the profits. Following her friend’s suggestion now she has expanded her business to the extent that from a small shop operating from her home, she has changed it to a chain store having its 6 branches in the city.

Q1: ‘In the beginning, she catered to the orders of customers directly’. Who serves as the last link in the distribution channel?
(a) Wholesalers
(b) Retailers
(c) Agents
(d) Customer

Correct Answer: Option (b)
A retailer is a person or business that you purchase goods from. Retailers typically don't manufacture their own items. They purchase goods from a manufacturer or a wholesaler and sell these goods to consumers in small quantities.

Q2: Identify which of the following is not an advantage of a chain store?
(a) Elimination of middlemen
(b) No bad debts
(c) High operating cost
(d) Diffusion of risk

Correct Answer: Option (c)
Operating expenses (OPEX) are the costs a business incurs to stay up and running. They're also called Selling, General, and Administrative (SG&A) expenses. Examples of operating expenses are rent, payroll and benefits, inventory, banking fees, marketing ads, business licenses, and transportation.

Q3: ’ Chain stores are examples of which type of retailers?
(a) Fixed shop small retailers
(b) Fixed shop large retailers
(c) Itinerant retailers
(d) Single-line stores

Correct Answer: Option (b)
Fixed shop retailers are retail shops that maintain a permanent establishment to sell their merchandise. The characteristics of fixed shop retailers are: They have greater resources and operate at a relatively large scale as compared with the itinerant traders.

Q4: Identify which of the following is not the service of retailers to consumers?
(a) New product information
(b) After-sales service
(c) Wide selection
(d) Promotion

Correct Answer: Option (d)
In business, promotion is any communication that attempts to influence people to buy products or services. Businesses generally promote their brand, products, and services by identifying a target audience and finding ways to bring their message to that audience.

Case 3: Laxya’s Market Visit
Laxya is an NRI who came to India to visit her grandparents living in the small town of Jaipur. One day, during the absence of her grandfather, when her grandmother fell sick, Lakshya decided to go to the market to get the required items. Her grandmother told her, “There is no fixed shop retail store selling all the goods under one roof in this town. You have to buy the items from the traders who do not have a fixed place to operate.” She instructed Laxya to: (a) Buy the vegetables from the cart-pushers who come to their doorstep to supply fruits and vegetables. (b) Buy nail cutter and peacock feathers for pooja ghar from Som Bazaar, which is held on every second Monday of the month, outside the Shiva temple. (c) She will get a magazine near the bus stand from the retailers who sit on the pavements. (d) For small wooden handicrafts, she can find a temporary shop in the next lane, which was hired by a person a month before.

Q1: ’ There is no fixed shop retail store selling all the goods under one roof in this town’. Identify the type of retailer mentioned here:
(a) Departmental stores
(b) Mail-order house
(c) Super Markets
(d) Co-operative houses

Correct Answer: Option (a)
Departmental stores are large-scale retail stores selling under one roof under a single control. They deal in a variety of goods. They are divided into different departments, each selling a particular merchandise. Departmental stores are of French origin.

Q2: “Buy nail cutter and peacock feathers for pooja ghar from Som Bazaar, which is held on every second Monday of the month, outside Shiva temple.” Identify the types of retailers as stated in the given sentence:
(a) Street trader
(b) Cheap jacks
(c) Market trader
(d) Hawkers and Peddlers

Correct Answer: Option (c)
An investor who makes many trades throughout a trading day, buying and selling securities in order to profit from short-term changes in prices. For example, a trader may buy Stock A at $15 per share because he/she believes it will be $18 a few minutes or hours later.

Q3: “For small wooden handicrafts, she can find a temporary shop in the next lane, which was hired by a person a month before only”. Identify the types of retailers as stated in the given sentence:
(a) Street trader
(b) Cheap jacks
(c) Market trader
(d) Hawkers and Peddlers

Correct Answer: Option (b)
The term "cheap Jack" (sometimes "cheapjack") refers to a seller of cheap or inferior quality goods. The person being referred to is often a traveling salesperson. The term is also sometimes used as an adjective describing goods of inferior quality or construction.

Q4: “You have to buy the items from the traders who do not have a fixed place to operate.” Name such retailers.
(a) Itinerant retailers
(b) Fixed shop retailers
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Correct Answer: Option (a)
Itinerant Retailers: These are retailers who do not have a fixed or decided place of business. Their business is characterised by moving their shops around, sometimes even on a daily basis. Their sale is to the final consumers of the goods, so they are retailers, even if they do not have a standard place of business.