What is a service in economic terms?

A service, in economic terms, is defined as an intangible product that fulfills wants and needs. Unlike goods, which are physical and can be touched and stored, services are activities or benefits provided to consumers that cannot be owned. For example, when someone goes to a hairdresser, they are receiving a service rather than purchasing a tangible product. This distinction is crucial because it highlights that services are often experienced or consumed at the moment they are provided.

Intangible products like healthcare, education, and entertainment play a significant role in modern economies, as they contribute to consumer satisfaction and overall economic activity. Understanding this concept is essential in economics as it encompasses a vast range of industries and consumer interactions where value is created without the transfer of physical goods.