PRODUCTIONAND

COST CONCEPTS

BASIC PRODUCTION CONCEPTS

Capital

Entrepreneurship

Land

Labor

Manufacturing

Assembly

Processing

Service operation

Finished

products

Semi-process

ed product

s

Services

Production Inputs

Production Process

Production Outputs

Point of Comparison

Fixed Factors

Variable Factors

divisibility Indivisible large unit

Divisible small unit

Necessity in

production

example

Supplementary: even in their

absence some amount of

production can be carried out

Plant, machinery,

manager, land factory

premises, etc.

Without these

factors no production

can be carried out

Labor, raw materials, transport, freight etc