When it comes to capital goods and consumer goods, then those terms are mainly used on the basis of their needs. In this case, one thing you have to keep in mind is that capital goods are used mainly for production, and consumer goods are mainly used for productive usage. In this article, we are going to discuss the difference between capital and consumer goods.

What Are Capital Goods?  

Capital Goods are known as intermediate goods or producer goods, which are used to develop consumer goods. In this case, capital goods are actually machines such as plants and machinery, furniture, vehicles, office buildings, and so many others.

When a business is planning to purchase capital goods, then it is actually an important expense for the Business. Hence a business needs to invest a large amount of capital. After that, a business won't demand profits immediately, and in this case, it is important to wait for years to get profits.

Although these goods are depreciated over a few years, even businesses can claim partially for the tax deduction.

What Are Consumer Goods?  

Consumer goods are also known as final goods. In this case, those tangible goods are mainly used for consumption by households, individual people, and so on. If they get satisfied after utilizing the final goods, then the demand for those consumer goods will be increased.

Consumer goods are further subdivided into durable goods, nondurable goods, and also services. On the other hand, consumer goods include those products in daily usage, like household appliances, furniture, electronic items, and so many others.

The Difference Between Capital Goods And Consumer Goods  

Below we are going to discuss the differences between capital goods and consumer goods.

1) Consumer goods are known as final goods, which are used by the end-user for utilization. Meanwhile, capital goods are developed for producing consumer goods or final goods.

2) consumer goods can be B2B which means Business to Business, or it can be B2C which means Business to customers. But when it is about capital goods, then it is only B2B which means Business to Business.

3) Consumer goods are mainly bought for personal consumption. At the same time, capital goods are bought to meet the business expectation and business goals.

4) The target audiences of consumer goods are mainly normal people. On the other hand, the target audience of capital goods is mainly business manufacturers.

5) Capital goods help to create capital goods job for job seekers. But consumer goods won't be able to do so.

6) Consumer goods have direct demand because they can directly satisfy the needs of consumers. On the other hand, capital goods satisfy consumer needs indirectly because they have procured demand.

7) Suppliers will fix the price of consumer goods. But the prices of capital goods will be determined by the companies.

8) Consumer goods are mainly made up for final consumption. On the other hand, capital goods are mainly concerned with the final investment.

FAQs:- 

Below we are going to discuss some of the important frequently asked questions about consumer and capital goods.

1) What Are The Examples Of Capital Goods Vs. Consumer Goods?  

Ans: Capital goods are man-made products that are mainly used for production. In this case, a manufacturer buys a 3D printer; then, this is an example of capital goods. Here the manufacturer will create 3D prints, which he/she will sell in the market. Thus, 3D printers here are being used for commercial use.

At the same time, this 3D printer a manufacturer can sell to a household person, which will become a consumer good. Actually, there isn't much distinction between capital goods and consumer goods, but the thing is how goods are used and who uses them.

2) What Is The Difference Between A Capital Good And Capital Stock?  

Ans: When it is about capital goods, then it means they are assets. In this case, they are used by manufacturers and companies in the production procedure.

On the other hand, capital stock refers to the total physical capital which is available in the Business. Actually, capital stock can refer to the amount of the preferred and common shares of the company which is authorized to issue.

3) Is It Justifiable To Consider A House As A Capital Good?  

Ans: A house can be a capital good if it is used by a business to produce services and goods. In this case, just like tools, machinery, equipment, and vehicles, a house can also be a capital good. At the same time, a house can be a consumer good because it is purchased mainly for residing purposes.

4) What Are Fast-Moving Consumer Goods?  

Ans: When it comes to fast-moving consumer goods, then they are cheaper products. In this case, they can get sold quickly, like fruit, milk, vegetables, soda, beer, and so many others.

In Conclusion  

We have discussed the difference between capital goods and consumer goods above in this article. After reviewing some points, it is quite clear that there isn't much distinction between capital goods and consumer goods.

For example, a juice machine is getting purchased for business purposes. At the same time, a juicer machine is purchased for household work. Thus it can be said that capital goods and consumer goods are quite similar, but the difference is all about the basics of using the technique.

AUTHOR BIO

Miranda Shaffer is a passionate blogger. She loves to share her thoughts, ideas, and experiences with the world through blogging. Miranda Shaffer is associated with The Global Magazine, Top Preference, and Big Jar News.