factors of production

  

Definition

Resources required for generation of goods or services, generally classified into four major groups:

  1. Land (including all natural resources),
  2. Labor (including all human resources),
  3. Capital (including all man-made resources), and
  4. Enterprise (which brings all the previous resources together for production).

These factors are classified also as management, machines, materials, and money (this, the 4 Ms), or other such nomenclature. More recently, knowledge has come to be recognized as distinct from labor, and as a factor of production in its own right.

Use this term in a sentence

  • Factors of production facilitate the creation of products, but they are not part of the final product nor changed during the process of creation.

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