Give reasons or explain: 4. Raw material is considered as a variable capital.

Give reasons or explain:

4. Raw material is considered as a variable capital.

ANSWER:


Variable capital refers to the capital whose demand changes over time. In other words, it refers to the capital that is used in the process of production only once. Since the demand for raw materials changes overtime, and it is used in the process of production only once, it can be considered as a variable capital.

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