Question

explain the term phiysical capital in economics ​

Answer 1

In economic theory, physical capital is one of the three factors of production. Physical capital consists of tangible, man-made objects that a company buys or invests in and uses to produce goods.

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Answer 2

• Physical capital is one of what economists call the three main factors of production. It consists of tangible, man-made goods that assist in the process of creating a product or service. The machinery, buildings, office or warehouse supplies, vehicles, and computers that a company owns are all considered part of its physical capital.

• KEY TAKEAWAYS

In economic theory, physical capital is one of the three factors of production.

Physical capital consists of tangible, man-made objects that a company buys or invests in and uses to produce goods.

Physical capital items, such as manufacturing equipment, also fall into the category of fixed capital, meaning they are reusable, and not consumed during the production process.

• Sometimes called simply "capital," this factor includes man-made items or products that make the manufacturing process possible or enable it to run smoothly. Some types of physical capital are directly involved in the production, such as the welding equipment that fuses parts of a car on the factory floor. Others are indirectly involved, such as the computers and printers in the executive headquarters.