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All capital goods are producer goods …

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All capital goods are producer goods but all producer goods are not capital goods.explain
  • 1 answers

Sneha Manchanda 5 years ago

Producer goods are those goods which producer purchases for using them in the process of production. There are two types of producer goods :1) Capital goods and 2) Raw material . They both help in the process of production. Capital goods are those goods which are purchased by the producer and are of high value and can be use for several years . Both conditions are to be fulfilled if we want to say a particular good as a capital good. If a good is of high value but can't be used for several years then it would not be considered as capital good like raw material. And if a good can be used by producer for several years but it is of low value then it is also not a capital good like a screw . As it is now clear that all capital goods are producer goods because they are purchased by producers to be used in the process of production but all producer goods are not capital goods because all producer goods are not of high value as well as having a life span of several years.
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