FACTORS OF PRODUCTION

Productive resources used to produce given produce are called factors of production. These productive resources may be raw materials, services of various categories of labourers, or capital supplied by capitalists or entrepreneurship of an entrepreneur who assembles the other factors of production. These factors or resources are also called inputs. Thus, the factors of production are traditionally classified as land, labour, capital, and organization. Production, in economics, is understood as the transformation of inputs (or) factors into outputs.