Jolenealaska Jolenealaska 3, 12 12 silver badges 25 25 bronze badges. To make it even simple, in a layperson's language - Commodities are something used to make goods. Also, consider the last two paragraphs of Jolenealaska. Maulik V Maulik V I hope you find it useful.
Please edit your post to include the revelant excerpts that answer the question here. Answers that are simply links may be deleted. Featured on Meta. Now live: A fully responsive profile. Linked 1. Related 4. It is true that producers of differentiated products can charge any price they want. Actually, commodity producer can do the same. But will anyone buy the product at that price? Only if the perceived value of the product to the consumer is greater than the price.
Remember, the calculation of profits involves price multiplied by sales, not just price. Much of the advertising and promotion that occurs in our society — of which there is plenty — is focused on trying to convince consumers that their product is better than those of competitors. Whether it is actually better is immaterial. The only thing that counts is if you can convince the consumer that it is better.
For example, is Miller Lite beer better than Bud Lite beer, or vice-versa? There are millions of beer drinkers who will argue that question from both sides.
There is the false perception in agriculture that the emergence of niche markets provides for product differentiation. In the business world a commodity is a special type of goods. Goods can be almost anything physical that's offered for sale. A commodity is a type of goods that have standard characteristics - which means the commodity is EXACTLY the same, no matter where you buy it.
For example, a certain grade of crude oil is a commodity. You can buy and sell it anywhere in the world, on any commodities exchange, and it will be exactly the same product.
Certain types of semiconductors e. Bulk raw chemicals are usually commodities. Highly-rated answerer. Does Wikipedia promise anywhere that its entries are consistent with each other? Add a comment. Active Oldest Votes. Improve this answer. Robusto Robusto k 37 37 gold badges silver badges bronze badges. I agree. A central quality of goods is that they are physical objects so they definitely don't include services.
A central quality of commodities is that they can be traded so they don't include human rights , in an ideal world. I think there are no goods which are not also commodities , but plenty of commodities which are not goods.
A commodity is not "simply something which can be bought and sold". It almost always refers to goods which are not differentiated from each other. Marcin: Yes it is. An article of commerce is something that can be bought or sold. That's a brilliant word. Robusto: I'm sorry, but I just don't accept that that reflects the dominant usage in current writing. I think this is the key distinction. I believe this may be the definition of fungible, not commodity.
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