Question

It’s important in business today for all firms to work to cut out the middleman. Intermediaries represent costs that can be saved by finding ways to cut them out of the system. Down-channel buyers always benefit when this happens."" Do you agree with this statement? Why or why not? Be specific in arguing your point based on what you learned in this chapter.

Answer 1

Answer:

Yes: Middlemen represents costs

No: Middlemen could have exclusive access to customers

No: Cutting out middlemen will lead to unemployment on the long run

Explanation:

Why it is true that cutting off middlemen could reduce business costs in the sense that they (middlemen) usually buy from manufacturers and charge additional costs before selling to final users, it should also be known that sometimes these middlemen bridge the gap between supply and demand by taking the products from where they are produced to where the customers are found.

A second consideration is that cutting off middlemen will as a result create unemployment for all those middlemen that will be cut off.