Livestock Economics, Marketing and Business Management

GOODS AND ITS CLASSIFICATIONS

Classification of Goods

• Anything that satisfies human wants is called goods or commodity.
• Goods can be classified into

Free goods

• Air we breath has utility for us. So it is a commodity. For the use of this commodity we do not pay any price.
• Such goods are called free goods. Free goods are available in plenty and not in scarce.

Economic goods

• Milk is a commodity we have to pay price to get it.
• Such goods are called economic goods.
• They are available in scarce.

Visible goods and non-visible goods

• Egg can be seen and felt by touch. Such goods are called material or visible goods.
• Copy write of books or services of a doctor can be sold for money but they cannot be seen or felt, such types of goods are immaterial or invisible goods.

Consumer and Producer goods

• We use goods like egg, pen etc. which satisfy our wants directly. They are called consumer goods.
• We use goods like machine to produce other goods. They do not satisfy our wants directly.
• Such goods are called producer goods or capital goods or investment goods.

Durable goods and perishable goods

• Goods, which decay quickly, are known as perishable goods. Eg. Milk.
• Goods which lasts for long period are called durable goods. Eg. Incubator, milking machine, etc.

Competitive goods

• Production of one good must be forgone in order to produce more of other good. For example for a given level of maize, one has to give up a certain level of piggery production in place of increasing broiler production.

Supplementary goods

• Some positive level of one good is produced without reduction in output of another good. For example, women labourer employed in backyard poultry keeping.

Substitute goods

• If price of one good falls with consequent increase in demand for it, the demand for other related good decreases and can act as substitute for the first one. Soya can be substituted for maize in feed ration.
  

Complementary goods

• If production of one good causes the increased production of another goods. For example a legume in rotation increase the production of grain crops in alternate years