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A commodity in economics is a good, such as food, metals or grains, which is interchangeable with similar goods, and which is available in large quantities. Oil is an important commodity.

Investors can buy or sell on commodities exchanges using futures contracts.

More generally, a commodity is any good in a competitive market.

  • hedgers and hedge funds attempting to protect against losses in price fluctuations
  • speculators who attempt to profit from price fluctuations
  • supply and demand
  • consumer sentiment

In general parlance, a commodity is a good where the good supplied is indistinguishable from one supplier to another. A consumer, then, only considers price when making a purchasing decision. In recent years, computers have become a commodity.