Four factors are
used in a production function, that factors are known as the factors of
production. Those factors are explained as follows.
Ø Land.
Land means the all gifts of nature. It
include, natural fertility of the soil, minerals, forests, rivers, sea etc, the
basic nature of land is its supply is fixed. The reward paid for the owner of
land is rent.
Ø Labour
The word labour means human effort of all
types-manual and non manual, skilled and unskilled. The supply of labour is
detained by the population. In that how many are ready to work that is the work
force. Work force quality is depends upon the education and training.The reward
available to the labour is wage.
Ø Capital
The thing used to produce one commodity is
capital. Capital is type, that is working capital and fixed capital.Capital
reward is interest.
Ø Entrepreneur A person who joining the other three
factors of production are known as entrepreneur. For taking the risk of
production the entrepreneur gets the reward profit.
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