The correct option is (a).
Explanation
A chain of markets refers to the series of exchanges that connect the producer of a raw material to the final consumer of the finished product. It involves various intermediaries such as wholesale traders, processors, and retailers.
Statement-wise Analysis:
- Statement 1 is Correct: The chain of markets effectively links the primary producer (e.g., a cotton farmer) to the final buyer (e.g., a customer purchasing a shirt at a supermarket). Goods pass from one market to another through this chain.
- Statement 2 is Incorrect: Buying and selling takes place at every stage of the chain, not just the final stage. For instance, a trader buys cotton from a farmer, a ginning mill buys from the trader, a spinning mill buys from the ginner, and so on. Each link involves a transaction.
- Statement 3 is Incorrect: All participants in the market chain do not earn equal profits. In practice, there is a significant disparity in earnings. Typically, retailers and large merchants earn higher profits, while primary producers (like farmers) and workers often earn the least, sometimes barely covering their costs.
Key Takeaway:
The chain of markets facilitates the flow of goods from production to consumption through multiple transactions, but the distribution of profit among the economic agents involved is rarely equitable.