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Question

What is the difference between capital goods and final goods?


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Solution

The differences between capital goods and final goods are as follows:

BASIS OF DIFFERENCE

CAPITAL GOODS

FINAL GOODS

PRICING

Costlier in comparison to consumption goods

Comparatively cheap

DEFINITION

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

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

DEMAND

Demand for capital goods is comparatively less

Final goods have high demand

PURPOSE

Capital goods are purchased for the manufacturing of consumer goods

Final goods are purchased in order to fulfill personal consumption needs

TARGET MARKETING

Manufacturers

Consumer

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