What is the purpose of the three factors of production?

Answer 1

The purpose of the three factors pf production

1. Land: Land is to provide the site needed for establishment of industry. A firm should be sited at a land suitable for the productivity activity such in the sense that it will lower the cost of production. For Instance, for production of cement to be established, a firm should have a land/ site where should resources are abundant. e.g in Ewekoro land of Ogun state. this resources are abundant thus reducing the cost of production. Land as a factor of production may purposely be useful for other aquatic functions and this functions are numerous. So, land and water covers about 99% of the earth surface.

The purpose of land as a factor of production or production input is to serve the following reasons:

Land as a factor of production may be used for aqua-culture or aquatic activity such as rearing of fishes, livestock and building of land/site/ for industries. Land encourage investors to organize a ready made market for trading transaction e.g shares and stocks are traded in the banking sector and in the stock exchange market . It encourages mobility and exchanging of goods and services. Without land, purpose of production would be forfeited as without head no human sense or oblangata could function properly.

2. Labour: Labour are the productive resources or input used in the production process. The combine and use both physical/mental effort to organize sales and to make finished productive. Labour are human and they may be educated or uneducated but still use experience in the production process. Labour as human may result to Entrepreneur.

Labour as a productive resources should possess enough skills. Without enough mobility of productive factors like labour, no firm would achieve a realist profit. Labour moves vertically or horizontally at the point of sales or services. Pending, this factors improves trade efficiency. Hawkers are people in form of labourers.

3.Entrepreneurship is a higher stage of production. It brings decision on how to organize the selling activity to realize profit or revenue in the year. Such decision are however based on how to produce, what to produce and for whom to produce this goods and services. It accords the dairy of the daily activities.

4. Capital: Capital is a useful factor of production. Capital however determine the amount of input to be hired in production. The higher the capital the greater the resources to be purchased. A firm with a higher capital can sustain the needs of the consumer in mobility, services or factors of production by knowing the environmental demands. Capital as a factor of production will encourage the workers/labourers/labor to work. A firm with a sustainable capital will adopt a solid economies of scale.

Generally speaking, all factors of production are purposely meant for utility creation (i.e they are meant to satisfying the public through the procrument of services and goodsl) A good factor of production as discussed should have a fluent and audible consumer attendance and procrument approach. The approach to services to consumer will allow them to patronize the company and adding to the image of the company.

In addition: The purpose of these factors of production