Assessment of Skills and Knowledge(ASK) in Fundamental Business Concepts Practice Test

What is a defining characteristic of trade-industry businesses?

1. They produce products only for personal use.

2. They provide services instead of products.

3. They sell products to others.

4. They only engage in international trade.

The correct answer is: They sell products to others.

The defining characteristic of trade-industry businesses is that they sell products to others. This encompasses a wide range of activities, including the wholesale and retail distribution of goods. These businesses do not typically manufacture their own products; instead, they play a crucial role in the supply chain by connecting manufacturers with consumers or other businesses that need these products. Trade-industry businesses can include everything from large retail chains to small local shops, all of which facilitate the flow of goods from production to the end-user. This aspect of selling products is what differentiates trade-industry businesses from others that may focus on personal use or services. For example, businesses that produce products solely for personal consumption do not engage in trade with external customers, and those that provide services primarily focus on intangible offerings rather than tangible goods. Additionally, while some trade-industry businesses might engage in international trade, this is not a defining characteristic, as many operate solely within domestic markets.