Different types of goods

A brief description of different types of goods

1. Abhi

2. Goods used for final Consumption are
called Consumer Goods
Eg. Food, Home, Car
Goods used for production of other goods
are called Producer Goods
Eg. Plants, Machinery, Factory

3. Goods which are consumed finally
Satisfy customer’s wants directly
The analysis used to study Consumed
Goods is called Demand/ Revenue analysis

4. Can be used to produce Consumer goods or
Producer goods themselves

5. Consumer
Good
Producer
Good

6. According to Layman, goods perishable
after use are called non-durable goods
Later new economics definition came ; non-
durable goods are goods perishable after
one use .Eg. Bread, Milk,
Purchased at regular intervals
Only current demand to be met
corresponding to current conditions
Serviceability not generally required
Classified into perishable and non
perishable goods

7. Perishable goods are lost after a period of
time
Eg. Teaching Services, Doctor’s service,
Medicines
Non-perishable goods are not lost after a
period of time
Eg. Coal

8. Goods being used for a continued period
of time. Eg.TV, refrigerator
It either satisfies new demand or replace
old set.
Requires special facilities to use. Eg. Car
needs Petrol Pump, Refrigerator needs
Electricity.
Consumed by more than one person.Eg.
TV, Radio
Serviceability is required. So segregation
of new demand and service required
Demand analysis is heavily complex

9. A good whose demand increases when
income increases and demand decreases
when income decreases.
It’s price remains the same

10. Inferior goods are goods whose demand
decreases as income increases.
It has negative elasticity of demand
Eg. A Man who had a recent hike in salary
pay less on cheap dress.
Superior gods are goods whose demand
increases as income increases
It has high positive elasticity of demand

11. In Ireland, the poor people used to
consume more potatoes(inferior good) and
less meat using their miniscule daily
budget
During a famine when cost of potato was
increased it was found that the
consumption of potato has been increased
This phenomenon defied the law of
demand as of then, and was called the
Giffen paradox

13. In economics, a luxury good is a good for
which demand increases more than
proportionally as income rises.
It has a high elasticity of demand
Their quality, durability or performance that
are remarkably superior to the comparable
substitutes Eg. Gold ornaments
Needs good Brand Power
With time can assume status of normal goods

14. Goods which ascribe high status and value
Eg. Antique Collections, Limited Edition
Goods
Bought by richest section of people

15.  A good's demand is increased when the
price of another good is decreased.
It has negative cross elasticity of demand
Eg. Pencil and Eraser consumption in case
of a accounting firm.

16. Managerial Economics, GS Gupta, Tata-McGraw
Hill, 2007
Principles of Economics, DN Dwivedi, Prentice Hall
India, 2004
Managerial Economics, R L Varshney and KL
Maheshwari, Sultan Chand & Sons, 2005
Modern Economic Theory, KK Dewett, S. Chand &
Company Ltd, 2005
Managerial Economics, Dr. MS Subrahmanian,
Ramesh Publications, 1995
http://www.moneyterm.co.uk