Factors of production in plywood

October 16, 2020. – In economics the factors of production are the things needed to produce output, like plywood. The three basic factors of production are land, labour and capital. In modern business there are other factors as well, but let’s play a game and examine the plywood industry in relation to these three, classical factors.

Usually, enough land is available. But if we extend the meaning of land to include natural resources like wood, there have been shortages every now and then. With labour the situation has been similar with occasional shortages. However, workforce availability varies between different mill locations. Although in small businesses there is never too much capital, the current funding market is flooding with money and has too few sensible places to invest.

I expect that in the future, even if money gets tighter, funding will remain available for feasible and sustainable investments. Labour and wood will likely become more scarce in the long term. Therefore it is wise to cultivate and look after them now.