Utilizing the factors of production

Labor, land, and capital in the call of factors of production due to these factors provide a means by which goods and services produced. Some economists adding a fourth factor: the business (enterprise). This is because the labor, land and capital alone will not produce anything unless there is someone ready to buy and organize for action. People who carry out this task we might think of as business people, technically known as entrepreneurs (entrepreneurs). Entrepreneurial activity is to utilize the factors of production.

Each of the factors of production receive some form of special revenue. Labor receive a salary, receive land rent, capital received money and the rental company to receive benefits. We will further review them one at a time when we talk about income distribution.

Textbooks spend a lot of time to describe and analyze how the production begins and organized, factor  what to use, and how much will be paid to these factors. Broadly speaking, the answers to these questions are as follows: An entrepreneur decides to produce certain goods or services. It may be of wheat, in which case we may conclude that he was a farmer, or medical care (physician), or ship (industrialist), or the defense of the country (government, because the term "entrepreneur" can be applied to a group, in addition to the individual. actual individual entrepreneurs often develop wings to form a partnership (partnership) or limited liability company (joint stock company) is a company that shares ownership can be bought by outsiders. Actually the latter is the most typical forms of business organization in the modern free enterprise economy). The entrepreneur will consider a range of factor is available, labor, land, and capital in a way that if he can combine these factors and how much he had to pay for each factor. If she individuals or groups who seek a profit, he will consider how much he will be able to sell its products. After he was going to make these decisions, based on all available information, it will be able to produce and sell its products. If the calculations right, he will earn a profit, and others are encouraged to follow the production line. If he missed, he will lose money, and production was halted. In this way direct profit motive of economic activity.

Company Size
With the ever increasing production unit (called the company), comes the advantages and special problems. On the positive side, the company may enjoy a so-called economies of scale (economi of scale). The so-called economy of scale is a division of labor specialization include: working on a raft-line motor, for example, may spend all his time to menyekrupkan certain nuts on the bolts on a wheel certain. Large corporations also enjoy the advantage of being able to use a larger engine and more specifically, easily obtain money for capital, and risk more calmly. So it is not surprising that there is a strong tendency of increasing dominance of large companies in most modern economies.

But the size of the company also brought problems, both for the company itself, the company may be difficult to manage in an efficient, boredom and lack of flexibility to workers, as well as for society as a whole. Palin is a serious problem of a monopoly or limited company to be large enough to dominate the industry tetentu and can raise the price of output to its own advantage to the detriment of society.

So post this time, less or more please we discuss in the comments.