![]() ![]() ![]() To point out, this characteristic is evidence that the supply of land is perfectly inelastic. This means that no amount of change in demand can change the supply of land. Obviously, the quantity of land in existence will always remain the same and no human power can alter that. Land is a strictly fixed factor of production. ![]() To put it differently, land can be used for production without paying any money to the ultimate owner i.e. In that case, there are some characteristics that ease out this confusion by clarifying the factor of production-land.Įvery factor of production which comes under the umbrella of land should have no supply price. To point out, a factor of production can be a combination of work done by human efforts and natural occurrences. On the contrary, the definition of land in the economics, of course, is an area, but also includes all the free gifts of nature like water, air, natural resources etc. Browse more Topics under Theory Of Production And CostĪ man with little or no knowledge of economics would think of the significance of land as an area required for production. These factors of production- land, labour, capital, and entrepreneur, always accompany the process of production. Every possible aspect required for production is a part of these four factors. Luckily, production still and will continue to rely upon a certain set of factors, that enclose the ever-increasing complexities in their bubble. With increasing complexity in the world economy, the complexity of the production process is sky-rocketing. 3 Solved Example on Factors of Production Factors of Production ![]()
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