A firm is an individual production unit which produces goods and services for sale in the market. There are certain production units like charitable schools, charitable hospitals and government units provide services not to earn profit. They work for social welfare. Normally, a firm is concerned with the production of a single commodity.
Industry is a group of all the firms making production of a commodity (one type of good). For example Bata Shoe Company is a firm which makes shoes but the shoe industry includes all the firms producing shoes. So Bata, Action, Liberty, Adidas, Nike and Reebok form the shoe industry.
There are various types of industries supplying different types of goods and services. For example, agriculture industry supplies food grains, vegetable, fruits, cotton, pulses, milk and butter, etc. In the same way other industries supply various other goods and services like clothes, televisions, computers, scooters, refrigerators, air conditioners, cars, etc. So all these industries play a vital role in day to day life.
1. Goods and services for consumption: These days human wants are growing at a faster rate. In order to satisfy these wants various types of goods and services are required for our daily consumption. All these goods and services are provided by firms and industries.
2. Goods for investment: We require various types of goods for investment. We require machines, plants, transport vehicles likes buses, trucks, railways and aeroplanes, ships etc. and various other things for investment. All these things are produced by firms and industries.
3. Employment to many persons: Firms and industries are the source of employment to the people. Most of the people get employment in firms and industries by which they get income for the satisfaction of their wants. We cannot live without employment.
4. Infrastructure for the development of the country: They provide energy, transport, communication, health, education and housing which is the basic requirement to provide infrastructure for the country. Without the development of infrastructure the all round development of the country is not possible.