Commodities Production

Definition

Commodities production refers to creating goods that are fundamental to society and have a set value in the market. These can be agricultural products like wheat or corn, mined materials like gold or silver, or energy sources like oil.

Analogy

Commodities production is like baking a cake. The ingredients (raw materials) are mixed together (processed) to create the final product (commodity), which has a certain value in the market.

Related terms

Supply and Demand: This refers to the amount of a commodity, product, or service available and the desire of buyers for it.

Market Economy: An economic system where decisions regarding investment, production and distribution are guided by price signals created by the forces of supply and demand.

Industrial Revolution: A period from 1760 to 1840 when major changes in agriculture, manufacturing, mining, transport, and technology had a profound effect on socioeconomic conditions.