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Difference between capital goods and capital …

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Difference between capital goods and capital goods

    • Posted by Adarsh Bhandya 6 years, 4 months ago

    CBSE > Class 12 > Economics
    • 1 answers

    Sia ? 6 years, 4 months ago

    Differences between consumer goods and capital goods are

    <th scope="col">Basis</th> <th scope="col">Consumer Goods</th> <th scope="col">Capital Goods</th>
    Meaning These goods are purchased by consumers for the satisfaction of their wants. These goods are purchased by manufacturers and producers for the production of other goods. 
    Use These are for own use. These are used for the production of final goods and services.
    Demand Direct demand as they directly satisfy the human wants. Derived demand as their demand depends upon the demand of consumer goods.
    Expected Life  Most of the consumer goods ( except durable goods) have limited expected life. Capital goods generally have an expected life of more than one year.
    Example Bread, butter, jam, etc. Plant and Machinery, equipment, etc.

    Both of these are final goods as they have crossed the boundary of production and are not for resale and does not involve any value addition.

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