They required an entrepreneur to put their idea into action and use the other factors of production to create the product they envisaged. Whether this is the iPhone, the television, or even a simple toaster. Through the entrepreneur, the other factors of production are combined to create a final product. Whilst not tangible, it is definitely a factor of production, for, without it, labour, land, and capital all go unused. These are the traditional factors of production, but we can also include entrepreneurship in this category. Quite simply, the production function calculates the amount of labour, capital, and land that would produce the optimal level of output. The level by which labour is required over the capital, or capital over land, can vary with the relationship between them called the production function. For instance, some are capital intensive such as oil extraction, whilst others are labour intensive, such as restaurants.
Each industry depends on one factor more than another.The factors of production come together to create an economic output.There are four main factors of production land, labour, capital, and entrepreneurship.