Factors Of Production

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Economic resources: land, capital, labour, and entrepreneurial ability.

• The entrepreneur is an innovator—the one who commercializes new products, new production techniques, or even new forms of business organization.

• The entrepreneur is a risk bearer. The entrepreneur in a market system has no guarantee of profit. The reward for the entrepreneur's time, efforts, and abilities may be profits or losses. The entrepreneur risks not only his or her invested funds but those of associates and stockholders as well.

Because these four resources—land, labour, capital, and entrepreneurial ability— are combined to roduce goods and services, they are called the factors of production.

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