Question

Give reasons "Raw material is considered as a variable capital".

Answer 1

Constant and Variable Capital. Constant Capital is the value invested in the means of production (MP) and thus embodied in them. Therefore, when Marx speaks of constant capital, he sometimes refers to the MP itself and sometimes to the value invested.

Answer 2

Raw material is considered as a variable capital because the cost associated with it is variable on account of the varying quantity of the goods required.

* These are goods, also referred to as a factor of production required in the primary production of the final product.

* The number of final goods to be produced determines the quantity or amount of raw materials required and hence is a variable entity.