Summary Note
Key concept recap
Introduction to Services
Services are separately identifiable, essentially intangible activities that provide satisfaction of wants, and are not necessarily linked to the sale of a product or another service. Unlike goods, the purchase of a service does not result in the ownership of anything physical — one can only experience a service. For example, you can only seek advice from a doctor; you cannot purchase the doctor.
A good is a physical product capable of being delivered to a purchaser and involves the transfer of ownership from seller to customer. The key distinction between goods and services is that while goods are produced, services are performed. The effect of a service can be taken home but the service itself cannot, and since services are sold at the consumption point, there are no inventories.