Levels of Production

Subsistence

This is the lowest level of production. Subsistence productions refers to output from the production process that is just enough for the survival. This amount of production is therefore not adequate to meet all needs and wants of a family, community or a country. For example, subsistence farming involves the production of crops to feed the family and for survival. Wealth is not created as whatever is produced is consumed.

Domestic Production

Domestic production refers to production that is more than survival level. It provides output that is enough to satisfy domestic needs and wants. Excess is not available for export. However, production is adequate to supply local demand.

Surplus or Export 

This level of production is adequate to supply local demand and for export.  Large industries can produce large quantities of output to satisfy local consumption and earn foreign exchange from export, for example, the sugar and banana industries.

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