Features of the Factors of Production are listed in this article. We hope you find it helpful and educative.
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For a company to produce products that are of high and standard quality, the company cannot operate without some factors.
These factors are what we often refer to as ‘Factors of production. Factors of production can be defined as all the resources needed during the production process of a company either on a large or small scale.
There are four basic factors of production, which are; Land, Labour, Capital, and Entrepreneur. In this article, we will carefully take a look at the features of the Factors of production.
Features of the Factors of Production
Below are the Features of the Factors of Production:
This is a free gift of nature, nobody created it, it is purely natural and it makes up for all-natural resources like gold, sea, forest, etc. which may be found in it.
As long as production is concerned, It is very indispensable because it acts as a base for the existence of other factors of production.
Features of Land:
- It is a free gift of nature.
- It is not man-made or artificial, it is only created by God.
- It is a fixed factor of production, its quantity cannot be increased or decreased.
- It cannot be moved from one place to another because of the fact that it is immovable.
This is the effort, discharged or put in by man during the process of production to ensure the success of the production. It has a lot to do with the physical and mental ability used to do work.
It directly involves the act of transforming raw materials into finished goods through physical and mental ability. As a medium of compensation, labor receives wages and salaries for the effort discharged during work.
Read Also: Features and Importance of Land
Features of Labour:
- Labour is exerted by man (i.e. artificial)
- It can be said to be variable in supply because it can either increase or decrease in quantity based on some other factors.
- It is not static, it can move freely from one place to another depending on where it’s most favorable.
- When it’s not improved upon, it can depreciate in value.
This is the amount of wealth that is put aside to produce more wealth for the owner. This capital may either be in the form of cash (money) or intellectual property) It is very important based on the fact that all other factors of production can be gotten only through it. It is even the base upon which the production process begins.
Read Also: Characteristics of Labour
Features of Capital:
- Capital is made by man (i.e. it is artificial).
- It is durable because it can be kept for a long time without getting spoilt
- It is mobile (i.e. it can be moved easily from one point to the other). ‘
- The profit or commission made upon capital is often called ‘Interest’
- Capital is variable; It is not fixed in the supply
The is a person who puts together all other factors of production to make a business out of it. An entrepreneur is usually a person who identifies problems and works out modalities to solve the problems using the availability of land, capital, and labor.
Features of an Entrepreneur:
- He has the capital, possesses the land, and employs the labor.
- He is durable and creatively seeks a way to improve the production process of the enterprise.
- He is mobile and can move very freely.
- He rightly divides the profits made in favor of each of the other factors of production, especially labor.
Read Also: Types and Importance of Capital
Now, you must have learned something new about the factors of production and as a prospective business person, you know what you must have or put in place before you launch your business venture.