differentiate b/w volume of trade and value of trade
Priya, it is a good question.
To understand the concepts of value and volume, first look at the equation below.
Now, amount of trade can change due to any one or couple of following options.
1. Only change in per unit price
2. Only change in number of units (or quantity)
3. When both the variables change
When we say value of trade, then we mean change in amount of trade due to change in price only. On the contrast, when we are concerned about volume of trade, then it is related to quantity (or units) of goods traded only.
To understand the concepts of value and volume, first look at the equation below.
Now, amount of trade can change due to any one or couple of following options.
1. Only change in per unit price
2. Only change in number of units (or quantity)
3. When both the variables change
When we say value of trade, then we mean change in amount of trade due to change in price only. On the contrast, when we are concerned about volume of trade, then it is related to quantity (or units) of goods traded only.