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Difference between Goods and Services

In order to satisfy unlimited wants people take up economic activities in the form of land, labour, capital and organization. As a result of the combination of these four factors of production goods and services are produced. These are the (limited) resources to satisfy human wants. What are the real resources or what are goods and services?

Goods:

A good is a material thing used to satisfy a human want or in other words, a good is a material thing which has utility to satisfy any human want. For example, chair, table, book, table lamp, paper, pen etc. are all goods which are used to satisfy different wants.

Services:

There are many wants which can be satisfied only by services and not by goods. Services of doctors, teachers, advocates, actors etc. are definitely required to satisfy some of our wants. That is why we pay a price for services as we pay for goods.

The prices of goods and services are determined in the market through the forces of demand and supply. The price mechanism enables the producers to produce and supply and consumers to demand and consume the goods and services.

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