Question

Define services and goods?

Answer 1

Services are intangible activities that require personal interaction between the consumer (purchaser of the service) and the service provider (seller of the service) at the time of delivery. The services need not involve any production or sale of goods. Generally, services are classified into the following two categories.

(a) Business services: These include banking, insurance and warehousing services.

(b) Professional services: These include legal services, medical advice and tax consultancy.

In contrast to services, the term ‘goods’ refers to physical and tangible objects whose ownership gets transferred to the buyers as soon as he or she purchases these objects. Examples of goods are televisions, radios and shoes.