Final Goods V/s Intermediate Goods

Final Goods

Final goods are those goods that do not require further processing and are ready to use. These goods are also called consumer goods and are manufactured for the purpose of direct use by the end consumer. In a nutshell, final goods are products that are manufactured by a company for consumption by the consumer in the coming time. These goods aim to satisfy the needs or wants of a consumer. Final goods are neither resold nor used for further transformation in production....

Intermediate Goods

Intermediate goods are goods used to produce a final good or finished good for the purpose of selling it to the consumers. Intermediate goods like salt can be a finished product, as it is consumed directly by consumers and can be used by producers to produce other food products.Intermediate goods are sold between industries for the resale purpose or for the production of other goods. These goods are also called semi-finished products, as they are used as inputs to manufacture finished products.While calculating GDP, economists use the value-added method for intermediate goods to make sure that they are not counted twice, i.e., once when they are purchased, and once when the final product is sold.There are normally three choices for the use of intermediate goods. A producer may produce and use their own intermediate goods. The producer may also sell them, which is most commonly practiced between industries. Companies purchase intermediate goods for particular use in producing either a secondary intermediate product or in producing the finished product. Usually, all intermediate goods are either a part of the final product or are totally reconfigured during the production process....

Final Goods V/s Intermediate Goods

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