This refers to exchange of goods and services for goods and services.this trade has several drawbacks.
- It is difficult to estimate the value of one good with another
- It depended on double coincidence of wants between traders.
- Perishability of some commodities tomatoes,fruits and milk could go bad very easily hence could not be stored.
- Divisibility aspect was a problem i.e. it wasn’t easy to divide some commodities into smaller goods.
- Portability – it was difficult to transport goods since some were heavy and bulky.
MERITS OF BARTER TRADE
- Buyers and sellers are able to get the goods and services they require immediately after the exchange.
- A country/person is able to dispose off the surplus.
- Promotes social relations among the trading communities,through negotiations
- Promotes specialization in the production of goods and services i.e. concentrate on what you can offer best.
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