Difference Between Economics and Commerce

Economics vs Commerce

Economist is concerned with the economic system and its operation in the country; whereas, the transfer of the results of production from producer to the consumer would be the key concern in commerce. Commerce has been part of history. From trading using barter system to selling and buying using currency, the activity of exchange of items of value between persons and companies has been in existence. When a person trades in a country, the trader will be concerned on the changes in the economic system of the country as this determines to a certain extent whether the business achieves success or failure.


Being derived from an ancient Greek word, Economics is the social science analyzing production, distribution and consumption of goods and services. It could further be stated that economics is the study of  the the forces of supply and demand and how that allocate scarce resources. Economics can be subdivided broadly into microeconomics and macroeconomics. Microeconomics study the behaviour of firms, consumers, and the role of government; macroeconomics is the study of inflation, unemployment, industrial production, and the role of the government in those. Resource availability and utilization are important in understanding economics. As resources are limited it is essential to utilize these efficiently and effectively, and the study of economics is based on this principle.


Commerce could be illustrated as the activity of buying and selling, especially on a large scale that makes up the business environment. With the traditional trading (barter system) to the introduction of currency, which still makes exchange of goods and service possible, all revolve around the buying and selling activity. In today’s world, commerce has a complex system, where companies offer products and services at the lowest production cost and try to maximize their profit. Thus, commerce is the exchange of items of value. The same principle is used in e-commerce, where buying and selling of goods and services on the internet/world wide web.

What is the difference between Economics and Commerce?

Although both share similarities, the following differences could be highlighted.

· Economics is a broader study about how individuals, businesses and societies use the resources, whereas Commerce involves the study of goods sold by producers to the consumers.

· Economics goes on to study the impact of businesses, government legislation, banks etc., as opposed to Commerce, which doesn’t have a wide area of study.

· Commerce detains its scope to business, whereas economics explores not only the business but also pubic policies and division of labour.

· Economics has a broad number of fields and areas to specialize in compared to commerce.

· Commerce examines trade and exchange, while economics examines this and extends its study to production and consumption.


Economics and Commerce might have their differences, but in overall, as a trader is influenced by the economic conditions in the country, commerce is affected by economics. Understanding the economic forces helps to achieve a high return for the trader. Hence, it could be said that commerce falls within the scope of economics but economics extends beyond commerce.