Describe the concept of exchange and list the five conditions that must be satisfied for exchange to occur. If all conditions are met, does that guarantee exchange will occur? Explain why or why not.
What will be an ideal response?
The concept of exchange simply means that people give up something in order to receive something that they would rather have. Money, goods, or services may be the medium of exchange. The five conditions of exchange are:
| 1. | There must be at least two parties. |
| 2. | Each party has something that might be of value to the other party. |
| 3. | Each party is capable of communication and delivery. |
| 4. | Each party is free to accept or reject the exchange offer. |
| 5. | Each party believes it is appropriate or desirable to deal with the other party. |
Exchange will not necessarily take place even if all these conditions exist. They are necessary for exchange to be possible, but unless the buyer and seller reach an agreement, an exchange will not take place.
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