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Factors Of Production Impact The Fabrication Of Commodities Essay

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Factors of Production:
Factors of production impact the fabrication of commodities. These factors are the inputs for the creation of goods and services applied to make an economic profit (Investopedia, n.d), and fall within four categories—land, labor, capital, and entrepreneurship (Nickolas, 2015). Understand-ing these inputs is paramount as incremental changes in a cost structure can determine a profit and a loss (Mohr, n.d.).
For Johnson & Johnson (J&J), the three key factors are land, labor, and entrepreneurship. Land is the economic resource encompassing natural resources found within a nation’s economy (Vitez, n.d.). Natural resources do not turn themselves into products; labor is required. Labor is the available human capital which converts raw or natural resources into consumer goods (Vitez, n.d.). Except for the entrepreneur, all work performed at organizational levels signify labor (In-vestopedia, n.d). Entrepreneurship, on the other hand, involves the managerial tasks of assem-bling, allotting and dispensing economic resources or consumer products to individuals and other businesses (Vitez, n.d.). Furthermore, entrepreneurship includes the furthering new engagement and experimentation methods, which may lead to more revenue (Miller, 2016).

Costs:
It is no secret that to create a product, there are costs. A company’s costs govern its product prices. Artificial hip implant costs range from $1,797 to $12,093 (Robinson et al, 2012). As such, this range is
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