Goods and services

economic-dictionary

Goods and services are all the satisfiers that are made in the production process to meet human needs.

Of course, all production processes are intended to transform inputs and raw materials to turn them into products that can be classified as goods and services that are used to meet a need.

How do we know if a product is a good or a service?

In order to determine if a product is a good or service we must consider the following:

A good

  • Above all, it has a material or tangible consistency so that we can see and touch it, we can appreciate all its characteristics and material attributes.
  • On the other hand, they can be used or consumed to meet a need. A pencil is a good that you use to write, while a pizza you consume to satisfy your hunger.
  • Likewise, they can be transferred from one person to another through the buying and selling processes. A company that produces tires sells them to vehicle users, that is, the goods change their property rights from one person to another.
  • Finally, they have value in the market because they are scarce, the quantity of goods produced is limited or insufficient to cover the needs or desires of all the people in the market.

A service

  • In effect, the service is intangible, because nothing tangible is transferred, only the benefits or results of the service are received. If we put our vehicle in a parking service, what we can finally obtain is to be satisfied because our vehicle remains in good condition or dissatisfied because it was not what we expected.
  • In addition, they are inseparable from the people who provide it, it would be the case of a person who undergoes plastic surgery, the result obtained will depend a lot on the doctor who performs it.
  • On the other hand, the quality of the service also depends on the client who receives the service, because each client subjectively values ​​the benefit received. Therefore, a service that for someone may be deficient for another person could be totally satisfactory.
  • In reality, the services are very diverse, it means that if they depend on the person who offers them and the person who receives them, one of their main distinctive features will be diversity, since it is not possible to homogenize them.
  • Either way, a service cannot be stored or saved, this implies that a service can only be offered at the very moment it is produced. A massage service can only be offered at the time that the masseur is giving the customer service.

To conclude, we can say that both goods and services are products that have been produced with the objective of satisfying a need. However, they are different in that the goods are tangible, homogeneous, transferable and can be stored.

For their part, the services are intangible, heterogeneous, non-transferable and cannot be saved, because they are only actions or processes that are provided to clients.

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