- Intermediate goods are semi-finished products.
- They need further processing to become final goods.
- Example: Steel sheets, which become automobiles.
- Final goods do not undergo further transformation.
- They are consumed by ultimate consumers or used as capital.
- Example: A car purchased for home use (consumption good).
- Example: A tractor used in farming (capital good).
| Feature | Intermediate Goods | Final Goods |
|---|---|---|
| Processing | Require further processing | Do not undergo further transformation |
| Usage | Inputs for further production | Consumed by ultimate consumers or used as capital |
| Example | Steel sheets, tea leaves for a seller | Automobiles, tea leaves for home use |