Who are the consumers?

The next vital role is played by the consumers. Consumers are none other than the persons for whom the producer produce. The first producers in history produced only for themselves and their families. The food they ate, the clothes they wore, the dwellings they build were goods they produced for their own use. Using such goods that meet the direct needs of people is called consumption in economics.

Production to begin with then was for the producers or their families own consumption. But men and women gradually understood the advantage of exchanging one another’s products, each specializing in his/her own line of productive activity. Thus, the weaver produced only cloth and the cultivator only paddy and they exchanged their surplus outputs, so that both could eat rice and wear clothes.

Exchange was at the beginning between goods only- cloth for rise, rice for utensils, utensil for cloth and so on. This process of exchanges called barter. It continued until man discovered the use of money. When money came into use the weaver could sell his cloth for money and use that money for buying rice and utensils- which was much easier than having to exchange only through barter.

With the user of money coming into existence people as producer could be called buyers. The market was where they would go with their money for buying goods and with their surplus goods for selling their output for money.