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Question
Answer in brief.
State the features of Capital.
Solution
Capital includes all the capital goods or assets used in production. These assets are used by the labour to produce goods.
The following are some of the features of capital:
i. Artificial factor- Capital cannot produce goods on its own and therefore, is regarded as an artificial factor of production.
ii. Derived demand- Capital is used in the production of goods meant for final consumption. It cannot be consumed directly. Therefore, it is said to have a derived demand.
iii. Highly mobile- Capital includes machinery, raw materials etc. which can be easily transferred from one place to the other and from one occupation to the other.
iv. Elastic supply- The amount of capital can be increased at any time as per the requirement and availability of funds.
v. Durable- Capital is durable in nature in the sense that it can be used again and again in the production process.
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