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Question

Consider a farmer who grows wheat. The farmer sells his wheat crop to a miller. The miller breaks down the wheat to make flour. The miller sells the flour to a baker. The baker then uses the flour to make a pizza base and sells the same to a restaurant. The restaurant then uses the pizza base to make a pizza and sells it to a customer.

Identify the intermediate goods in the entire process.

A
Wheat
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B
Flour
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C
Pizza
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D
Pizza base
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Solution

The correct option is D Pizza base
Final goods, by definition, are goods that are directly consumed by the end-user. Here, pizza is the final product consumed by the customer. Goods that are used for further production or value addition are called intermediate goods. Here, wheat, flour, and pizza base are the intermediate goods.

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