Question

If a firm purchases goods for resale they will be called intermediate goods.So when these goods are sold to the final customers will they become final goods?

Answer 1

Tanya,

If a firm purchases goods for resale they will be called intermediate goods. Let us suppose that firm A purchased jeans from firm B with the purpose of resale are considered as intermediate goods. This is because value addition is yet to be done to the jeans by reselling it. When these goods are sold to the customers, then the value of final goods includes the value of intermediate goods.