Necessity vs. Commodity: What's the Difference?
Necessity refers to something essential for survival or fundamental needs, whereas a commodity is a raw material or product that can be bought and sold.
A necessity is something that is essential and unavoidable for living, such as food, water, and shelter. Commodities, on the other hand, encompass a broader range of items that can include necessities but also non-essential goods that are produced, traded, and consumed.
Commodities are often associated with trade and economics and can include basic goods like grain, metals, and oil, as well as finished products. Necessities, however, are generally not subject to the same market volatility as commodities, as their demand tends to be consistent due to their essential nature.
While necessities are crucial for maintaining life and basic well-being, commodities are not always essential and can be subject to market speculation. For instance, wheat is a commodity that is also a necessity, but gold, another commodity, is not a necessity.
The concept of necessity can vary based on individual circumstances and cultural contexts, but it typically relates to basic human needs. Commodities, however, are universally recognized in the context of economic markets and are often subject to global price changes.
Necessities usually have inelastic demand, meaning their consumption doesn’t change much with price fluctuations, while commodities can have elastic demand, with consumption heavily influenced by market prices and availability.
Essential for survival or basic needs
Tradable item or raw material
Inelastic, consistently needed
Can be elastic, subject to market forces
Can be non-essential
Less subject to market change
Subject to market speculation and changes
Water, food, shelter
Gold, oil, coffee beans
Necessity and Commodity Definitions
A fundamental need that must be met.
Health care is a necessity that should be accessible to all.
An item of trade or commerce, especially a raw or agricultural product.
Coffee is a valuable commodity in the global market.
An indispensable item or condition.
Electricity has become a necessity in the modern world.
A basic good used in commerce that is interchangeable with other goods of the same type.
Oil is a commodity that powers industries worldwide.
An unavoidable requirement or need.
In the desert, shade is not a luxury but a necessity.
A product that is bought and sold in an economic market.
Wheat is a commodity subject to price changes based on harvests.
Something essential for basic survival.
Clean water is a necessity for life.
A tangible item that is produced for exchange.
Smartphones have become a widely used commodity.
Something that cannot be done without.
A good internet connection is a necessity for remote work.
Something of use, advantage, or value.
Time is a precious commodity for a busy professional.
The condition or quality of being necessary.
Something useful that can be turned to commercial or other advantage
"Left-handed, power-hitting third basemen are a rare commodity in the big leagues" (Steve Guiremand).
The necessities of life include food, clothing, and shelter.
A product or service that is indistinguishable from ones manufactured or provided by competing companies and that therefore sells primarily on the basis of price rather than quality or style.
Is internet access considered a necessity or a commodity?
Internet access is often seen as a necessity in the modern world, but it is also traded as a commodity.
Can a commodity also be a necessity?
Yes, some commodities like food and water are also necessities.
Can the definition of necessity change over time?
Yes, what is considered a necessity can evolve with society and technology.
What defines a necessity?
A necessity is defined as something essential for survival or basic functioning.
Why are commodities important in the global economy?
Commodities are the building blocks of the global economy, crucial for trade and manufacturing.
What role do commodities play in the stock market?
Commodities are traded on the stock market as futures contracts for profit and investment diversification.
What impact do natural disasters have on commodities and necessities?
Natural disasters can disrupt supply chains, affecting the availability and price of both commodities and necessities.
What is a commodity in economic terms?
Economically, a commodity is a basic good interchangeable with other similar goods.
What is considered the most basic necessity?
Basic needs like food, water, and shelter are considered the most fundamental necessities.
Are all commodities physical items?
Most commodities are physical, but some, like bandwidth, can be intangible.
How does scarcity affect commodities and necessities?
Scarcity can increase the value of commodities and make accessing necessities more challenging.
How does demand for necessities differ from commodities?
Demand for necessities remains constant, while demand for commodities can fluctuate with the market.
How are commodity prices determined?
Commodity prices are determined by supply and demand dynamics in the global market.
How does technology affect commodities?
Technology can increase the efficiency of commodity production and change market dynamics.
Is education a necessity or a commodity?
Education is widely considered a necessity, but it is also commercialized as a commodity in some contexts.
Can a luxury ever become a necessity?
Over time, what was once a luxury can become a necessity as society and lifestyles change.
Do all countries have the same necessities?
Essential needs are similar, but cultural and geographic differences can affect what is considered a necessity.
Can commodities be services instead of goods?
Yes, services like electricity and waste disposal are also considered commodities.
Are necessities always affordable?
Not always; even necessities can become expensive due to scarcity or high demand.
Why is water considered both a commodity and a necessity?
Water is a commodity because it is traded and managed, but it is also a necessity for human survival.
Written bySumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
Edited bySawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.