At this stage, newer commodities appeared, and progressive people often came into touch with relatively backward people. Needs of people got multiplied and the need for exchange arose. In the beginning, trade took the form of direct exchange. Goods were delivered at a particular fixed place in exchange for other goods. The functions of trade were gen really exercised by princes, nobles, priests, high officials, land owners, etc. in the beginning. Gradually, the trader appeared on the scene.
At this stage, trade assumed certain fixed forms. Production began to be undertaken for catering to th needs of fixed markets. These markets gradually developed into large towns. Division of labor became increasingly important. Traders were divided into wholesale and retail merchants. For the first time, prices began to be fixed regularly, and credit began to be allowed. To regulate commercial intercourse with foreign merchants who were often mistrusted, merchant guilds, which were public and semi public institutions, were organized in towns.
After this only international trade came into action.
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