Difference between intermediate consumption and final consumption class 12
Looking for the difference between Intermediate consumption and final consumption as per class 12 CBSE Board, ISC, and other state board.
I have explained this topic in detail.
| Basis | Final consumption | Intermediate consumption |
| Meaning | Final consumption refers to the expenditure of those goods which are used either for consumption or for investment. | Intermediate consumption refers to the expenditure on those goods which are used either for resale or for further production in the same year. |
| Nature | Final consumption is included in domestic and national income | Intermediate consumption is neither included in domestic nor national income. |
| Value addition | expenditure is incurred on such goods which are ready for final consumption. No further value is added in such goods. | Such expenditure is incurred on those goods which are yet to be converted into final goods. further value addition is required to make them final goods. |
| Production Boundary | This expenditure is incurred on those that has crossed the production boundary. | Such expenditure is incurred on those that are still within the production boundary. |
| User | Final consumption is undertaken by both consumer and producer | Intermediate consumption is undertaken by only the producer |
| Examples | expenditure on milk, tv fridge by household, Machine purchased by producer | expenditure on milk purchased by sweets shop, expenditure on coal by factory |
