Competitive Analysis as per the Gross Domestic Product

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Competitive analysis 1.) a. What is the difference between a final good and an intermediate good? Give one example of each. How are they treated in GDP calculations? Intermediate goods constitute the finished goods that help in producing other goods while the final goods constitute the goods sold to the consumer. The demand for the intermediate goods is always for producing other goods and not be sold to the consumers (Bouman, 2012). This implies that the intermediate goods still have a process to undergo before the producers or the manufacturers avail them to the market, as the production is not for their own sake. However, the final goods are ready for the producers to avail them to the market since the production is for their own case. For instance, the example of a tire may help in differentiating the two categories. A tire may act as both an intermediate good and a final good. It acts a as a final good when a consumer buys it to replace a damaged tire in his or her car. However, the tire would act as an intermediate good when Ford motors takes the finished tire to put it on a new car. An example of intermediate good is raw cotton that the producers use in producing yarn. An example of final good is flour, which is a final good when used by a household. The treatment by GDP calculations also brings the difference on the way an economy view the intermediate and the final goods. The market value for the final goods represents the GDP of an economy since they (final

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