It is said that barter is 'inefficient' because: There needs to be a 'double coincidence of wants' ... If a person wants to buy a certain amount of another's goods, but only has for payment one indivisible unit of another good which is worth more than what the person wants to obtain, a barter transaction cannot occur.

Why is barter less efficient?

A barter exchange tends to be less efficient that exchanges involving money. In a barter exchange one good is traded directly for another. ... In fact, inefficient barter trading is the primary reason that money was invented. With money, more resources can be used for production and fewer are needed for trading.

What is the problem with bartering?

Another disadvantage of the barter system is that due to the absence of a conventional means of exchange (money), there is no divisibility. For example, a cow may be equal to the cost of 12 pairs of shoes. A person who wants to exchange a cow for just 2 pairs cannot divide it into smaller cows.