stages of production

Stages of production

There are 3 stages involve in the production of commodities.

Primary production (Extractive industries)

It is concern with the extracting the natural resources that serves as raw materials (free gift of nature such as land). It is done to exchange their original forms example is farming, fishing forestry, mining etc.

Secondary production (Manufacturing industries)

This involves activities that process or transforms raw materials into semi-finished goods like leather and finished goods like furniture, bags etc.

Tertiary production (Distribution industries)

It deals with the provision of services such services help goods produced to reach final consumers e.g. teaching, insurance, banking etc.

NOTE: productivity is the major output that can be produced with a given input within a given period of time while Efficiency is the ability of a worker to produce a greater output within a period of time.

Classification of output

Output is what is created or realized at the end of the production process. Output can be classified into two types i.e. Tangible and intangible.

Tangible goods:

These are items that can be seen and touched. There are two types of tangible goods

      i. Consumer goods:

there are commodities that satisfy the consumer wants directly. They are demanded for their sake and not for the sake of producing other goods.

Types of consumer goods
Durable consumer goods:

These are goods that can be used for a longer period of time without them going out of use e.g. Tv set, Radio, shoes.

Non-durable goods:

These are goods which get destroyed in a single use in the course of consumption e.g. Food stuffs, soap, pens etc.

ii.                   Producers goods:

These are goods which are not demanded for their sake but for the sake of using them to produce other goods e.g. Machines, factory buildings, hammers.

Intangible goods (services)

These are items which cannot be seen, touched and do not have weight but yield satisfaction to the consumer.

other types of goods

Economic good:

These are goods that are scares, possessed utility, command a price and their availability need the use of resources. E.g. A shirt.

Free goods:

These are goods that are not scares, has no price but yield satisfaction e.g. Air, sunlight, sand in desert.

Pubic goods:

They are goods and services provided by the state to be enjoyed by all citizens e.g. roads, street light, schools, hospitals.

Characteristics of public goods

  1. Non-excludability i.e. pubic goods cannot be supplied to one consumer without being supplied to others at the same time.
  2. Non-rivalry: i.e. as an individual consume a public good he doesn’t deprive from consuming it and obtain the same level of satisfaction.

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