Factor of production: Capital



Factor of production: Capital
Capital is any human-made product which is used to make consumer goods. Some people confuse capital with land and they think that both of them facilitate the production process. Remember that capital is something which is made by the humans and humans are not responsible for making the land on this earth. They might have some modification, but they have not built it. There are two types of goods: Capital and consumer goods. Supply of Capital can be increased or decreased on the preference of the owner. Capital also has geographical mobility. Sometimes it is difficult to shift heavy machinery from one place to another, but it does not mean that it cannot be shifted so we can say that the capital has geographical mobility.






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