PRODUCER GOODS

 Goods used for production of other goods are

called Producer Goods
Eg. 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

Produce
r
Goods

Consumer
Goods