Introduction
Production
is a process of using various material and immaterial inputs in order to make
output for consumption. Production process creates economic well-being. The
satisfaction of needs originates from the output. Production is the result of
cooperation of four factors of production (land, labour, capital and
organisation). In Economics, production refers to the creation or addition of
value. It simply transforms the inputs into output.
Production
may be at varying levels. The scale of production influence the cost of
production. All manufacturers are aware that when production of a commodity
takes place on a larger scale, the average cost of its production is low. This
is the reason why the entrepreneurs are interested in enlarging the scale of
production of their commodities. They stand to benefit from the resulting
economies of scale. There is also the possibility of making their products
available in the market at lower prices.
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