Intermediate good

A BMW car engine.

Intermediate goods or producer goods or semi-finished products are goods , such as partly finished goods, used as inputs in the production of other goods including final goods.^[1] A firm may make and then use intermediate goods, or make and then sell, or buy then use them. In the production process, intermediate goods either become part of the final product, or are changed beyond recognition in the process.

Intermediate goods are not counted in a country's GDP, as that would mean double counting, as the final product only should be counted, and the value of the intermediate good is included in the value of the final good.

The use of the term "intermediate goods" can be slightly misleading, since in advanced economies about half of the value of intermediate inputs consist of services.

Examples

Sugar – sugar is used as a final good (when it is sold as sugar in the supermarket) or as an input (when it is used as an ingredient in other food products)
Steel – a raw material used in the production of many other goods, such as bicycles
Car engines - Some firms make and use their own, others buy them from other producers as an intermediate good, then use them in their own car
Paint, plywood, pipe and tube, and ancillary parts
An interesting example is the use of chlorine in the production of polyurethane, which contains no chlorine. Rock salt is electrolyzed to produce chlorine, which is reacted with carbon monoxide to give phosgene. Phosgene, a chlorine compound, and a diamine are then reacted to produce a diisocyanate and hydrochloric acid that is neutralized in situ. The chlorine is removed as chloride salt waste. The diisocyanate reacts with a diol to produce polyurethane, which contains no chlorine. Chlorine is used because chlorine is electronegative enough to produce an isocyanate, but does not become a part of the product; it lowers the atom economy.

References

↑ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 301. ISBN 0-13-063085-3.

Types of goods

Public goods Private goods (includes household goods) Common goods Common-pool resource Club goods Anti-rival goods Global public goods Global commons

(Non-)Rivalrous goods and (Non-)Excludable goods

Complementary goods vs. Substitute goods vs. Independent goods

Free goods vs. Positional goods

(Non-)Durable goods Intermediate goods (producer goods) Final goods Capital goods

Inferior goods Normal goods (Necessity goods) Neutral goods Ordinary goods Giffen goods Luxury goods Veblen goods Superior goods

Search goods (Post-)Experience goods Credence goods

Merit goods Demerit goods

Damaged goods Composite goods Intangible goods

This article is issued from Wikipedia - version of the Monday, November 09, 2015. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.

Intermediate good

Examples

See also

References