These four factors-land, labor, capital, and entrepreneurship-combine together to facilitate the production of goods and services. Entrepreneurs play a crucial role in identifying business opportunities, assembling and allocating resources, making strategic decisions, and assuming the uncertainties and risks associated with starting and managing a business.
Capital can be classified as either physical capital or financial capital. It includes machinery, equipment, tools, buildings, infrastructure, and any other tangible goods that are employed to produce other goods and services. Capital: Capital refers to the physical assets or man-made resources used in production.Labour is a variable factor as it can be increased or decreased based on the needs of production. It encompasses the skills, abilities, and time contributed by workers. Labour: Labour includes the physical and mental effort exerted by individuals in the production process.Land is often considered a fixed factor because its supply is generally limited.
Land: This refers to all natural resources used in production, including land itself, as well as any minerals, water, forests, or other resources that are found in or on the land.The main factors of production are as follows:
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