The correct option is D Both A and B
The arrangement between the merchant and the weavers is an example of a putting-out system, whereby the merchant supplies the raw material and receives the finished product. The merchants purchase the yarn i.e the raw material and give instructions to the weavers about the kind of cloth that is to be made. Thus, the weavers do not have to spend their money on the purchase of raw material. Also, the problem of selling the finished cloth in the market is taken care of by the merchants.