'''Factors of production ''' are resources inputs used to produce [[goods]]. They first became essential during the Basic models of production have two input factors, [[industrial revolutionlabor]]and [[capital]]. In other contexts, when goods were manufactured in large quantities for the first timeadditional factors such as land or [[entrepreneur]]ship are considered.
These factors include resources In perfectly competitive [[market]]s, the factor price is equal to the marginal product of that are both human (factor, i.e.gthe amount of [[revenue]] gained by a small increase in quantity of factor used.So the price of labor, the real [[wage]], is equal to the marginal product of labor, workers or the amount of output that an extra unit of labor and entrepreneurship) and nonhuman will result in. A [[profit]] maximizing firm will produce where the marginal product equals 0. If the marginal product is positive (egreater than 0), the firm could increase output by employing more of the factor.gIf the marginal product is negative, the firm could increase output by employing comparatively less of the factor.When the marginal product equals 0, land and the firm cannot increase output by either increasing or decreasing output, so factors must be employed optimally. [[capitalCategory:Factors and Methods of Production]]).