Producer and consumer goodsPRESENTED BY

Rahat Inayat Ali14 CH 23

PRODUCER GOODS

Goods used for production of other goods are called Producer GoodsEg. Plants, Machinery, Factory

Producer goods are the machinery and other equipment used in manufacturing.

These goods are sold from one manufacturer to another manufacturer, or series of manufacturers, until finally consumer goods are made and sold to the customer.

Producer goods, also called intermediate goods, 

In economics, goods manufactured and used in further manufacturing, processing, or resale.

Producer goods either become part of the final product or lose their distinct identity in the manufacturing stream.

This method calculates the amount of value added to the final consumer good by each stage of the production process.

When the values added at all stages of production have been established, they are summed to estimate the total value of the final product.

The prices of producer goods are not included in the summation of a country’s gross national product (GNP), because their inclusion would involve double counting of costs and lead to an exaggerated estimate of GNP.

Only the price of final consumer goods is included in the GNP. The contribution of producer goods to the GNP may be determined through the value-added method.

Goods used for final Consumption are called Consumer Goods

Eg. Food, Home, Car

These are the final products, such as a dress or a car

Consumer goods are those things we average people buy to live.

Consumer goods are for the final consumer, as a person.

consumer good, in economics, any tangible commodity produced and subsequently purchased to satisfy the current wants and perceived needs of the buyer.

Consumer goods are divided into

three categories:

A. Durable goods,

B. Nondurable goods, and

C. Services.

DURABLE GOODS Consumer durable goods have a significant life span, often

three years or more (although some authorities classify goods

with life spans of as little as one year as durable).

Durable Goods

NONDURABLE GOODS Consumer nondurable goods are purchased for

immediate or almost immediate consumption and

have a life span ranging from minutes to three

years. Common examples of these are food,

beverages, clothing, shoes, and gasoline

SERVICES GOODS Consumer services are intangible products or

actions that are typically produced and consumed

simultaneously. Common examples of consumer

services are haircuts, auto repairs, and

landscaping.

Arbitrary Distinction

ConsumerGoods

Producer Goods