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Organisation of production (Industrial Sectors (Primary industries/Sector,…
Organisation of production
Industrial Sectors
Primary industries/Sector
Extraction of resources from the world
Secondary Industries/Sector
Manufacturing
Tertiary or Service Sector/Industries
Services
Adding Value
Difference between market price paid for a product and the cost of its natural and man-made materials, components and resources used to make it.
Aims of Production
Profit
An economic profit or loss is the difference between the revenue received from the sale of an output and the opportunity cost of the inputs used. In calculating economic profit, opportunity costs are deducted from revenues earned.
Profit Maximization
In economics, profit maximisation is the short run or long run process by which a firm may determine the price, input, and output levels that lead to the greatest profit
Other Objectives
Charities
Non-profit organizations
Public Services
Productivity
Measuring productivity
More output or revenue produced from same amount of resources
Same output or revenue produced by fewer resources
Labour productivity
Avg. product of labour= total output per period/number of employees
Avg. revenue product of labour= total revenue per period/number of employees
Division of Labour
Advantages
More goods and services can be produced
Full use is made of employees abilities
Time is saved
It allows for use of machinery
Disadvantages
Work may become boring
Workers may feel alienated
Products become too standardised