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SS3: COMMERCE - 1ST TERM

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  1. Business and Its Environment | Week 1
    2 Topics
    |
    1 Quiz
  2. Introduction to Marketing | Week 2
    6 Topics
    |
    2 Quizzes
  3. Consumer Protection | Week 3
    1 Topic
  4. Instruments for Protection | Week 4
    9 Topics
  5. Agencies that Educate and Protect Consumers | Week 5
    8 Topics
    |
    2 Quizzes
  6. Business Documents | Week 6
    3 Topics
    |
    2 Quizzes
  7. Means of Payment | Week 7
    5 Topics
    |
    1 Quiz
  8. Commercialization | Week 8
    4 Topics
  9. Privatization | Week 9
    4 Topics



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Lesson 8, Topic 3
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Advantages & Disadvantages of Commercialization

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These are some of the advantages of commercialization 

a. Reduction of Government Expenditure: It saves the government from financial burden on the maintenance and running of state-owned enterprises.

b. Diversification Of Government Funds: It helps to diversify public funds to some other investments and other areas that need to be prioritized in the economy instead of investing then on public enterprises.

c. It Creates Greater Competition: It creates an avenue for healthy competition between private enterprises and government businesses.

d. It Promotes Efficiency: The introduction of profit motive operation make the production of goods and services more efficient and effective.

e. It Reduces Private Monopoly: The introduction of commercialization policy ensures the simplification of private monopoly in the country.

f. It Encourages Effective Use of Resources: It permits effective utilization of both human and material resources at the disposal of public enterprises.

g. It Generates Funds to the Government: Commercialization provides an opportunity whereby the government generates more revenue to carry out certain political, economic and social responsibilities in the country.

Disadvantages of Commercialization

1. It reduces the standard of living due to the risk of an increase in the prices of goods and social services provided by government-owned firms.

2. It encourages high rate of consumer exploitation due to indiscriminate increase in prices of social goods and service.

3. It may bring an emergency of inflation in the economy when there is an increase in prices of goods and services without a corresponding increase in production.

4. Poor development of the capital market may cause commercialized state-owned enterprises some difficulties in raising adequate capital.

5. In order to maximize profit, some commercialized business enterprises may attempt to lay off some of their workers.

6. Commercialization policy often brings about an increase in the price of goods and services in an attempt to maximize profit.

7. It may bring about the emergency of uneven distribution of wealth and income in the country in the sense that only the rich who can afford commodities with high prices will be better off than the poor who cannot afford these expensive goods and services.

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