Tracing the

Impacts Through
the Distribution of
Outputs of a Firm
Guide Question

“What do we do with the

disposition of the output
produced by the business firm?”
Major Forms of Output

As intermediate inputs
As final outputs
As intermediate and final outputs for
exports
Output as Intermediate Inputs
Contributes to the integration of the various sectors in the economy
Made possible through forward and backward linkages of
industries that create additional income and employment to various
sectors of the economy
Used as contributions to the productivity of other industries
Such integration leads to higher economic growth.
Output as Final
Demand
For Personal Consumption

Impacts on consumers as shaped by

the price of the commodity, the quality
of the product and in addressing the
wants of its target consumers
For Investment
Production of capital goods like equipment, agricultural implements and
industrial tools that are sold to other firms not as intermediate inputs but as factor
inputs.
Contributes to the productivity improvement of the purchasing firm of these
capital goods
Strengthens integration of the economic sectors and promote faster economic
growth.
Domestic purchase of capital goods saves the country on the use of foreign
exchange
For Government Consumption
Provides a variety of public services
Refers to the product disposition as a combination of household
consumption and purchase of capital goods by firms.
Firms producing consumer and capital goods in support of the
government’s activities are enhancing the government’s role to
the public.
For Exports
Increase foreign exchange reserves in the country
Makes local products more globally competitive
Major exporters in the economy have the
capability to influence commodity prices