Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is a primary function of a supply co-op?

1. To distribute products to non-members

2. To purchase products for its members at wholesale prices

3. To impose taxes on its members

4. To manufacture goods exclusively for retail

The correct answer is: To purchase products for its members at wholesale prices

A primary function of a supply co-op is to purchase products for its members at wholesale prices. This allows members, often farmers or agricultural businesses, to benefit from lower costs on bulk purchases compared to buying retail. By pooling their resources, members can increase their purchasing power and access a wider range of products while reducing individual costs. This structure supports the overall financial health and competitiveness of the co-op's members in the market. The other options do not align with the fundamental role of a supply co-op. For instance, distributing products to non-members contradicts the cooperative model, which is designed to serve its members primarily. Imposing taxes on members is not a function of a co-op; instead, co-ops operate on a member-owned basis and focus on mutual benefit rather than taxation. Similarly, manufacturing goods exclusively for retail does not fit the purpose of a supply co-op, which focuses on providing supplies rather than producing goods for resale directly to consumers.