Problems with methods



Problems associated with each method

 

Number of employees

A capital intensive firm will employ less employees, but achieve high output and sales because the work will be done by the machines

 

Capital employed

A labor intensive firm might not invest in machinery and employ more employees but still achieve high output and sales

 

Profit

Very large firms do not make high profits because of various factors which include (government policies, bad governance)

 

Value of output and sales

A firm might be selling expensive products which achieves high output and sales

 






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