Factories are an example of which factor of production?

Factories are an example of which factor of production?

• A. Capital
• B. Labor
• C. Land
• D. Entrepreneurship

Answer: (A)

Factories are a form of capital—the man-made tools and facilities that make production possible. In economics, capital includes buildings, machinery, and other durable resources that businesses use to produce goods and services over time. They are not the workers themselves (labor), nor natural resources (land), nor the act of starting and organizing production (entrepreneurship). Factories enable labor and other inputs to be combined efficiently, and they endure across many production cycles, which is why they are classified as capital.

Factories are a form of capital—the man-made tools and facilities that make production possible. In economics, capital includes buildings, machinery, and other durable resources that businesses use to produce goods and services over time. They are not the workers themselves (labor), nor natural resources (land), nor the act of starting and organizing production (entrepreneurship). Factories enable labor and other inputs to be combined efficiently, and they endure across many production cycles, which is why they are classified as capital.