What is a grey market?
- The trade of a commodity which is unbranded
- The trade of a commodity which is recognized as a counterfeit product
- The trade of a commodity for which the country of origin is not mentioned
- The trade of a commodity for which the taxes are evaded
- The trade of a commodity through distribution channels not authorized by the manufacturer
The Correct Option is
Approach Solution - 1
A grey market refers to the trade of a commodity through distribution channels that are not authorized by the manufacturer. This type of market occurs when unauthorized dealers buy products in one market (often at lower prices) and sell them in another, bypassing the official channels.
Here is a step-by-step explanation of why the correct option is: "The trade of a commodity through distribution channels not authorized by the manufacturer":
- Understanding the Concept: The grey market is sometimes confused with the black market, which involves illegal trade. However, the grey market does not necessarily involve illegal products. Instead, it involves legal products but through unauthorized channels.
- Characteristics of Grey Market:
- Products sold are genuine but are not distributed under the sanction of the manufacturer.
- This could involve parallel imports, where products intended for sale in one market are imported and sold in another market.
- Eliminating Incorrect Options:
- Unbranded Commodities: The grey market is not defined by the branding of the products but by the channel used for distribution.
- Counterfeit Products: Counterfeit products belong to the illegal black market, not the grey market.
- Country of Origin: The specification or absence of the country of origin does not define the grey market.
- Tax Evasion: Tax evasion involves illegal trade practices and is distinct from the grey market.
The grey market can impact the prices and availability of products and may affect the profit margins of authorized dealers and manufacturers. Understanding the dynamics of the grey market is crucial for regulators, businesses, and consumers.
Approach Solution -2
A grey market refers to the trade of a commodity through distribution channels that are not authorized by the manufacturer. This often occurs when products are purchased in one market, where they may be priced lower, and then sold in a higher-priced market without the consent of the manufacturer. Grey markets can lead to various issues such as warranty conflicts, lack of post-sale services, and complications related to product authenticity. They are legal but exist outside the sanctioned distribution network, differing from counterfeit goods which are illegal replicas of products.
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Questions Asked in XAT exam
- An artificial swimming pool is circular and water is flowing clockwise at a speed of 3 km/hr. Two swimmers Ayub and Rana start from diametrically opposite points, Ayub in the anticlockwise direction and Rana in the clockwise direction. They first meet at a point such that Ayub has covered 60 m by that time. Their second meeting point is such that Rana has covered another 180 m after the first meeting point. If the speed of Rana in still water is 3 km/hr, find the time taken by Ayub to cover one full circle in the clockwise direction.
- XAT - 2026
- Time and Work
- Arrange the following generations from the oldest to the youngest:
1. Generation X
2. Silent Generation
3. Generation Alpha
4. Baby Boomers
5. Millennials
- XAT - 2026
- Current Affairs
- Read the following scenario and answer the THREE questions that follow.
Brijbhushan, a microfinancier, lends money at the rate of Rs.10 per square meter to small farmers at a village. He charges an annual interest rate of 10%. All the farming plots in that village are rectangular, with areas varying between a minimum of 1000 square meters and a maximum of 10,000 square meters.
This year, Brijbhushan has lent money only to five farmers: Aditya, Binod, Chhuttan, Dabloo and Govind. The perimeter of Chhuttan’s plot is 250 meters, with the length and width being at a ratio of 4:1. Aditya’s plot has an area three times the area of Govind’s plot. The area of Aditya’s plot is also the average of the areas of Govind’s plot and Dabloo’s plot. The plots belonging to Aditya, Binod and Dabloo are of the same width, but of different lengths. Moreover, the length of Binod’s plot is the sum of the lengths of Aditya’s plot and Dabloo’s plot.- XAT - 2026
- Mensuration
Light Chemicals is an industrial paint supplier with presence in three locations: Mumbai, Hyderabad and Bengaluru. The sunburst chart below shows the distribution of the number of employees of different departments of Light Chemicals. There are four departments: Finance, IT, HR and Sales. The employees are deployed in four ranks: junior, mid, senior and executive. The chart shows four levels: location, department, rank and gender (M: male, F: female). At every level, the number of employees at a location/department/rank/gender are proportional to the corresponding area of the region represented in the chart.
Due to some issues with the software, the data on junior female employees have gone missing. Notice that there are junior female employees in Mumbai HR, Sales and IT departments, Hyderabad HR department, and Bengaluru IT and Finance departments. The corresponding missing numbers are marked u, v, w, x, y and z in the diagram, respectively.
It is also known that:
a) Light Chemicals has a total of 210 junior employees.
b) Light Chemicals has a total of 146 employees in the IT department.
c) Light Chemicals has a total of 777 employees in the Hyderabad office.
d) In the Mumbai office, the number of female employees is 55.
- XAT - 2026
- Pie Charts
An investment company, Win Lose, recruit's employees to trade in the share market. For newcomers, they have a one-year probation period. During this period, the employees are given Rs. 1 lakh per month to invest the way they see fit. They are evaluated at the end of every month, using the following criteria:
1. If the total loss in any span of three consecutive months exceeds Rs. 20,000, their services are terminated at the end of that 3-month period,
2. If the total loss in any span of six consecutive months exceeds Rs. 10,000, their services are terminated at the end of that 6-month period.
Further, at the end of the 12-month probation period, if there are losses on their overall investment, their services are terminated.
Ratan, Shri, Tamal and Upanshu started working for Win Lose in January. Ratan was terminated after 4 months, Shri was terminated after 7 months, Tamal was terminated after 10 months, while Upanshu was not terminated even after 12 months. The table below, partially, lists their monthly profits (in Rs. ‘000’) over the 12-month period, where x, y and z are masked information.
Note:
• A negative profit value indicates a loss.
• The value in any cell is an integer.
Illustration: As Upanshu is continuing after March, that means his total profit during January-March (2z +2z +0) ≥
Rs.20,000. Similarly, as he is continuing after June, his total profit during January − June ≥
Rs.10,000, as well as his total profit during April-June ≥ Rs.10,000.
- XAT - 2026
- Logical and Analytical Reasoning Skills