Six Factors of Production

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Six Factors of Production

Capital

Money invested into the business referred to as monetary capital. Can be transformed into items to run business such as a truck. This is called liquid. Capital such as buildings or equipment are called non-liquid. Can not easily be transformed into ligiid capital. These are called capital goods. Intellectual property the ideas or talents of a business workforce. A non-tangible form of capital.

Information

Consumers competition Political conditions Sources of supply To produce goods and services in a competitive global market.

Management

Consists of people who run a business and control or direct the factors of production. Allocates company resources and makes decisions that affects the operation of the business.

Natural Resources

Agriculture Fishing and trapping Mining Water fuel and Energy logging and forestry Primary industry's that take something from the earth or sea. This is referred to as extractive industry's.

Labour

Physical and mental work Business now use automate and consolidate to save on labour cost. Outsourcing is the hiring of another company to perform tasks for your company. Another way to save money.

Raw Material

Ingredients - Added to be combined into the product. Supplies - Used to make the product Any goods used in the manufacturing of any other goods.