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Business Studies IGCSEPDF 139
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4.1 Production of goods and services
What is production?
Productionis theprocess of converting inputs (resources) into outputs (goods and
services) that satisfy consumer needs.
Productivity
●
Definition: Output per worker (or machine) per period of time.
→ Formula:
Productivity = Total output ÷ Number of workers
Importance:
● Higher productivity = lower average costs = higher profits.
● Can lead to more competitiveness.
● Inputs: land, labour, capital, enterprise (factors of production)
● Outputs: finished goods or services