Factors of Production
Business: Edexcel IGCSE, topic 5.3.1
Factors of Production
4 types of resources are needed for businesses to supply products or services to customers:
Land
- Land describes natural resources available for production.
- This can be anything from water to the raw materials from the primary sector that are needed to make the products.
Labour
- Labour is the people that contribute to the process of supplying the product or service.
- This might be people working in a factory or a hairdresser supplying the service to the client.
Capital
- The capital is the equipment, factories and offices that help to supply the goods or services.
- The key distinction between capital and land is that capital needs to be made first.
Enterprise
- Enterprise refers to the people who take risks and create a business from the other factors of production.