Define production. What are the factors of production?
Production means the creation of Utility. Through production inputs are converted into output which can satisfy or meet wants or demands. So production is a process of transforming inputs into useable outputs. Utilities are created in three forms such as (i) Changing the form (ii) changing time and (iii) changing place. Example: Wood in a forest generally has no utility to a consumer but cutting the wood, changing its shape or form it can be used for furniture or other uses.
The factors of production:
There are four factors of production:
Organisation or Enterprise
Land: it is a natural factor or nature’s gift to man. Land is fixed in quantity. It can be transferred but its ownership can be transferred. Labour: Labour is defined as both physical and mental work which is taken for monetary consideration. Any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the work is called labour. Capital: Capital refers to that part of men’s wealth which is used in producing further wealth or which yields an income. Organisation or Enterprise: The role that the entrepreneur plays consists in coordinating and correlating the other factors of production. Entrepreneurs' function is to initiate a business enterprise by mobilizing and harnessing the necessary productive resources. He takes the final responsibility of the business enterprise- risk taking and uncertainty bearing.
What are the forms of Entreprenurial Organization?
Forms of Entrepreneurial Organization
Sole Proprietorship or Individual Entrepreneur
Joint Stock Company
What are the advantages of Economies of large scale Production?
Economies of Large Scale Production:
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