BackOther Factors of Production: Land and Capital definitions
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1/15BackSkip to main contentBackLand
Physical terrain and natural resources, such as forests and oil, used in production and earning income through rent. Capital
Physical assets like factories and equipment utilized to produce goods and services, generating income via rent. Rent
Income received from providing land or capital for productive use, determined by market equilibrium. Marginal Revenue Product
Additional revenue generated by employing one more unit of a factor, guiding demand for land and capital. Supply Curve
Graphical representation showing the relationship between price and quantity offered for land or capital. Demand Curve
Graph depicting the relationship between the price of a factor and the quantity firms wish to employ. Perfectly Inelastic Supply
Situation where quantity remains unchanged regardless of price, illustrated by a vertical supply curve for land. Upward Sloping Supply
Condition where higher prices lead to increased quantity supplied, typical for capital in markets. Equilibrium
Market state where the quantity supplied equals the quantity demanded, setting the rental rate for factors. Rental Rate
Market price paid for the use of land or capital, established at the intersection of supply and demand. Production Function
Mathematical relationship showing output produced from varying amounts of inputs like land and capital. Diminishing Marginal Productivity
Phenomenon where each additional unit of input yields less extra output than the previous one. Physical Capital
Tangible assets such as machinery and buildings, distinct from human skills, used in production. Natural Resources
Raw materials found in nature, including minerals and forests, classified under land in production. Quantity
Fixed amount for land or variable for capital, representing the total units available or supplied in the market.
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