Forms of production

Direct production
-This is when one produces goods and services for their own consumption for example subsistence farming or a tailor making their own dress

Advantages

• Goods are tailor made according to one’s own taste.
• Leads to self-satisfaction
• Saves on labour costs
• Resources are fully used

Disadvantages

• Poor quality goods are produced as one is unlikely to have all the expertise required
• Lack of other related skills
• Does not satisfy some of the basic needs
• Lack of variety
• It takes a long time to complete the job

Indirect production
-This is when one spends his/her entire time in one occupation and then exchanges what he/she has made with others so as to satisfy his/her unfulfilled needs.

Advantages

• Goods are produced in large quantities
• Goods are produced in surplus
• The goods are usually of higher quality than in the case of direct production
• Leads to specialisation, standardisation and simplification
• Leads to a wide variety of goods.

To access more topics go to the Commerce Notes page.