Answer the following questions.
What are the features of capital?
ANSWER:
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.
