Difference between consumption goods and capital goods

Goods are defined as those items that can help in fulfilling humans needs and desires. Based on this definition, there are two varieties of goods that can be studied, which are consumption goods and capital goods.

Consumption goods are regarded as those goods that are most suited for final consumption. In other words, the end user of consumer goods is the consumer itself while the capital goods are those goods that are used for production of consumption goods.

Now, let us look at a few points of difference between consumption goods and final goods

Consumption Goods

Capital Goods

Definition

Consumption goods are those goods that are used by the consumers and have no use in future.

Capital goods are those goods that have a future use and are used for production of consumption goods

Purpose

Consumer goods are purchased in order to fulfill personal consumption needs

Capital goods are purchased for manufacturing of consumption goods

Target Market

Consumer

Manufacturers

Demand

Consumption goods have high demand

Demand for capital goods is comparatively less

Pricing

Comparatively cheap

Costlier in comparison to consumption goods

This article was all about the topic of Difference between Consumption Goods and Capital Goods, which is important for Commerce students. For more such interesting articles, stay tuned to BYJU’S.

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