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A intermediate good Its an object (good) that is used to make a final product that will later be marketed (sold). Ex. wood, flour.
It is said that a well it is intermediate when it requires a certain degree of modification, or when it is used within the production chain of another good.
It is also frequent to use the word intermediate goods such as synonymous with intermediate inputs.
There are two types ofintermediate good:
- When the good is intermediate because undergoes some modification for consumption. For example, wood that is cut, polished and is subjected to certain chemicals for its conservation and production of Wooden furniture.
- When the good is in the intermediate stage for the production of other products (final goods). For example the flour, oil, water, salt and sugar that are used to make the dough to prepare pizzas that will later be marketed. In this case it is a intermediate goodbecause it is used in the production of other goods to reach the final goods.
Goods and services
Although it is true that goods in general lines can be tangible (objects) as intangible (that cannot be measured or touched), it is important to make a clarification: An intermediate good is always an object. In economics, it is often indicated that goods are divided into products and services.
See also: Examples of tangible and intangible assets
For example, a car is not only bought for the car itself (product) but also for the brand, the after-sales service, the care received, the payment plans, insurance included, patent and some extra benefits that purchase may have. The latter is called service since it is not tangible but it accompanies said product orgood end.
In the case of intermediate goods, these can never be a service. In other words, an intermediate good is and will always be a product since it is part of the production chain.
It is important to make a distinction between a final consumer good and a intermediate consumer good since both terms are easy to confuse.
For example, eggs that are consumed in the home to prepare a meal are not intermediate goods. They are final consumer goods. However, the flour that is used to prepare meals that will later be sold in a business, Yes, it is an intermediate consumer good.
See also: What are the capital goods?
Examples of intermediate goods
- Steel. For the elaboration of beams and elements of construction of buildings.
- Water. Provided that it is used in the process of making another major asset for sale or exchange.
- Cotton. For the manufacture of fabrics.
- Clay. For the manufacture of bricks.
- Silica sand. For the manufacture of glass.
- Sugar and milk For the production of dulce de leche with which cakes or sweet masses will later be made. In certain countries of Central America this sweet is known as dulce de cajeta.
- Sugar. Since sugar can be used to make multiple sweet dishes, sweet and sour foods and desserts if it is mixed with water.
- Bike. If a bicycle is used to transport an employee, for example a postman. In other words, if the rolling is used as a work tool, then it is an intermediate good.
- Sugar cane. For the manufacture of sugar.
- Coal. For the manufacture of pencils, refractory crucibles and lubricating products.
- Paperboard. When this cardboard serves as an input in the company or as packaging of the final product.
- Cement. For the manufacture of houses.
- Copper. To produce integrated circuits that will later be part of different objects such as cell phones.
- Leather. For the manufacture of clothing or footwear.
- Fruits. If they are used for, for example, making jams or jellies.
- Sunflower. Sunflower oil and seeds are extracted from the plant. This oil, in turn, is used to make other products.
- Grain. For the preparation of baked goods for sale.
- Flour. When it serves as part of any of the ingredients for the manufacture of a food that will be marketed later.
- Eggs They are also generally used for the preparation of various dishes.
- Pencils and papers that are used in an office.
- Latex: For the manufacture of rubber.
- Milk. If it is used to make yogurt, cheeses, smoothies, etc.
- Wood. It is an intermediate good as it is used to manufacture furniture or real estate.
- Sewing machine. Provided that it is used for making clothing to sell.
- Paper. When these are used as a wrapper for a final product.
- Petroleum. For the preparation of gasoline (naphtha).
- Plastic. For the manufacture of containers with drinks or food.
- Wheels or parts of a vehicle. When what is marketed is the car.
- Drills, industry tools. Whenever they are used for the manufacture of furniture or things for sale.
- Wheat for the manufacture of flour.
Keep reading:20 Examples of consumer goods
