Question

Mr. Amit buys cotton in huge quantities from farmers and manufactures cloth out of it. He then sells the cloth to tailors who make garments according to customers' needs.
For all this, Mr. Amit uses a software that helps him monitor all his transactions.

Which of the following is true about Mr. Amit?

• A. Mr. Amit is a manufacturer and wholesaler of a tangible product.
• B. Mr. Amit is a manufacturer and wholesaler of an intangible product.
• C. Mr. Amit is a customer of a tangible product.
• D. Mr. Amit is a customer of an intangible product.

Answer 1

Answer: (A), (D)

Mr. Amit is a customer of an intangible product.

Mr. Amit buys cotton from farmers and makes cloth out of it. So, he is a manufacturer. He then sells the cotton cloth to small retailers, i.e., tailors, which is why he is a wholesaler. Cotton and cotton cloth are tangible products, so he is involved in visible trade, whereas when he uses a software, he is the final customer. As software is an intangible product, this is an invisible trade.