What are Capital Goods in class 12 CBSE Board?
What are Capital goods and how are they different from consumption goods in Class 12.
Here we are going to discuss the definition of Capital goods according to the syllabus of class 12 CBSE Board.
So, let’s understand what actually Capital Goods are
Definition of Capital Goods or Producers Goods
See, here the definition of capital goods is only restricted to the syllabus of the Class 12 CBSE Board.
Goods capable of being used for producing other goods are called capital goods.S.K AGGARWAL BOOK
For Example:- Machinery, Buildings, Equipment.
Types of Capital (Producers) Goods
The capital goods can further be classified as Single-use capital (producers) goods and durable-use capital (producers) goods.
a) Single-use Capital Goods
These goods are used up in a single act of production. Such goods are coal,
paper, cotton, etc.
For example, used in printing books and cotton is used in textile industries.
Once use, these goods lose their original shape.
Durable use capital or producers goods
These goods are used by the production units again and again. These are used in producing other goods for a long period of time.
They also do not lose their original shape and size.
For example:- machines, plants, buildings, tools, cars, tractors, etc.
Difference between Capital Goods and Consumption Goods
The basic difference between consumption goods is capital goods are only purchased by Producers. The main function of capital goods is to produce other goods.
On the other hand consumption goods are those goods which are purchased by the end consumers for only consumption purposes. Such goods are purchased by the end consumers.
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