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Factors of Production
The resources used to produce goods and services, typically categorized into land, labor, capital, and entrepreneurship.
Added Value
The additional worth created by a business when it transforms inputs into outputs, calculated by subtracting the cost of inputs from the price of finished goods.
Formula for Added Value
Added Value = Selling Price - Cost of Inputs.
Ways a Business Can Add Value
improving quality of product
Unique features
Branding
Convenience
Customer service
Opportunity Cost
The cost of forgoing the next best alternative when making a decision.
What are the 4 factors of production
Land,labor,capital,enterprise
What are the rewards of the 4 factors
Land-rent
Labour-wages/salery
Capital-interest
Enterprise-profit