Question

What is the Factor of production and factor payment for making a parking space?

Answer 1

To create a parking space we will need the following factor of production -

land - The most basic resource for any parking space is the same space. If there is no land, then where will the parking be done, so it is necessary to first determine the land. The land should be in a place where there is either a market or an education hub or a crowded area where peoples continue to come in so that the supply of vehicles in that parking space remains.

Capital - Once the availability of land is ensured, we need the capital to carry forward our plan. It will require working capital but building materials will also be required to build a parking structure.

Labor - Labor is a basic requirement in any construction, because the entire construction work is done by them. Construction of parking space will require some skilled labor such as engineers and also unskilled labor to work under their direction.

Entrepreneurship - An entrepreneur is one who holds the economic risk and brings other three factors of production together to accelerate the engine of economic growth . A parking space also want a entrepreneur who can take risk of it.

Factor Payment for parking space :-

Wage - We have to pay wages to the person who builds the parking space and who operates it.

Interest - If loan has been taken in the construction of the parking space, then the interest will have to be paid.

Rent - If we have rented the land, whether it is owned by the government or some other person, we will have to rent it.

Profit - If a parking place is built under the partnership, the partner is also required to benefit his share.