Question

What is a grey market?

• A. The trade of a commodity which is unbranded
• B. The trade of a commodity which is recognized as a counterfeit product
• C. The trade of a commodity for which the country of origin is not mentioned
• D. The trade of a commodity for which the taxes are evaded
• E. The trade of a commodity through distribution channels not authorized by the manufacturer

Answer 1

Answer: (E)

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.