ECO-Firms and production, page no 227 #Eco #Firmsandproduction

What is the meaning of labour-intensive production:

Labour-intensive means that a process, industry, or business requires a large amount of human labor (work done by people) to produce goods or services, rather than relying heavily on machines or automation. Examples of labor-intensive industries include agriculture, construction, and hospitality, where human work is essential to get tasks done.

What is the meaning of capital-intensive production:

Capital-intensive production means that a process, industry, or business requires a large amount of financial investment in machinery, equipment, or technology to produce goods or services, rather than relying mostly on human labor. Examples of capital-intensive industries include car manufacturing, oil refining, and telecommunications, where expensive machinery and technology are essential for production.

The difference between labour-intensive and capital-intensive production:

Labour-Intensive Production:

• Main Resource: Human labor(work done by people).

• Examples: Agriculture, hospitality, and handcrafts.

• Cost Structure: Higher labor costs; lower equipment/machinery costs.

• Characteristics: Requires many workers; often used for tasks that need manual skills or cannot be easily automated.

Capital-intensive production:

• Main Resource: Capital (investment in machinery, equipment, or technology).

• Examples: Car manufacturing, oil refining, and telecommunications.

• Cost Structure: Higher machinery and technology costs; lower labor costs.

• Characteristics: Requires expensive machinery; often used in industries where automation can boost efficiency and reduce human labor.

THE END