What is Merit and demerit of factor of production?

Answer 1

Merit of factors of production, such as land, labor, capital, and entrepreneurship, lies in their essential role in generating goods and services, driving economic growth, and improving living standards. They enable efficient resource allocation and innovation, fostering competitive markets. However, a demerit includes the potential for unequal distribution of resources, which can lead to economic disparities and social tensions. Additionally, overutilization of certain factors can result in environmental degradation and unsustainable practices.