Goods and services

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Service-Goods continuum

In economics, goods and services are the outcome of human efforts to meet the wants and needs of people. Economic output is divided into physical goods and intangible services. Goods are items that can be seen and touched, such as books, pens, salt, shoes, hats, and folders. Services are provided by other people, such as doctors, lawn care workers, dentists, barbers and waiters. Consumption of goods and services is assumed to provide utility (satisfaction) to the consumer.

The service-goods continuum[edit]

The dichotomy between physical goods and intangible services is an oversimplification; these are not discrete categories. Most business theorists see a continuum with pure service at one endpoint and pure commodity goods at the other endpoint. Most products fall between these two extremes. For example, a restaurant provides a physical good (prepared food), but also provides services in the form of ambiance, the setting and clearing of the table, etc. And although some utilities, such as electricity providers, exclusively provide services, other utilities actually deliver physical goods, such as water utilities.

Goods are normally structural and can be transferred in an instant while services are delivered over a period of time. Goods can be returned while a service once delivered cannot. Goods are not always tangible and may be virtual e.g. a book may be paper or electronic.

See also[edit]