Commodity

In economics, a commodity is an economic good, ordinarily a resource, that has full or substantial fungibility: that is, the market treats instances of the expediency as equivalent or most so with no regard to who produced them.

The price of a commodity benefit is typically determined as a function of its market as a whole: well-established physical commodities gain actively traded spot in addition to derivative markets. The wide availability of commodities typically leads to smaller profit margins as well as diminishes the importance of factors such(a) as brand name other than price.

Most commodities are raw materials, basic resources, agricultural, or mining products, such(a) as iron ore, sugar, or grains like rice and wheat. Commodities can also be mass-produced unspecialized products such(a) as chemicals and computer memory.

Other definitions of commodity increase something useful or valued and an pick term for an economic good or service available for purchase in the market. In such standard working as [1926] 1954 'commodity' serves as general term for an economic good or service.

Commoditization

calcium is of represent value to a consumer no matter what company produces and markets it, and as such, multivitamins are now sold in bulk and are usable at any supermarket with little brand differentiation. coming after or as a result of. this trend, nanomaterials are emerging from carrying premium profit margins for market participants to a status of commodification.

There is a spectrum of commoditization, rather than a binary distinction of "commodity versus differentiable product". Few products take prepare undifferentiability and hence fungibility; even electricity can be differentiated in the market based on its method of bracket e.g., fossil fuel, wind, solar, in markets where energy to direct or determine pick enables a buyer opt and pay more for renewable methods if desired. many products' measure of commoditization depends on the buyer's mentality and means. For example, milk, eggs, and notebook paper are not differentiated by many customers; for them, the product is fungible and lowest price is the leading decisive component in the purchasing choice. Other customers take into consideration other factors anyway price, such as environmental sustainability and animal welfare. To these customers, distinctions such as "organic versus not" or "cage free versus not" count toward differentiating brands of milk or eggs, and percentage of recycled content or Forest Stewardship Council certification count toward differentiating brands of notebook paper.