What Are the Factors of Production for Computers?

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The factors of production affect when a new computer is released.
The factors of production affect when a new computer is released. (Image: Comstock/Comstock/Getty Images)

The economic model for factors of production sets land, labor and capital apart as the discerning players. When it comes to computers, the factors of production operate under the same principles, but technology has different parameters for production in terms of how, when and why new models are created and marketed to the public.

Resources

In traditional factors of production models, the resources required to produce an item are known as "land." When it comes to computers, resources are materials such as microchips, metals, plastic casing and other components. What makes computers different is the ever-changing technology, which causes the pricing and availability of certain resources to fluctuate.

Capital

While a garment is an example of a labor-intensive item, computers are generally known as capital intensive, which means they cost more to produce when compared to other items. Computers don't require a large degree of manpower for production, but the needed machinery and technology is expensive and affects the volume of production. The more a computer costs to build, the higher its retail price, which in turn affects demand and, essentially, the profit and capital in one continuous round.

Entrepreneurship and Development

The computer industry often requires a high degree of entrepreneurship when it comes to the development and production of new technology. Late Apple CEO Steve Jobs presents an example of how entrepreneurship and risk play into the production of an item. As he worked with his team, he developed unheard of products, assuming the risk of a complete flop. The results -- the iPhone, MacBook, iPad and other items -- fueled further development and production in the industry.

Economy and Demand

The final factor of production for computers relies heavily on the consumer. As computer companies need to purchase resources, they need capital to increase development and production. A slow economy usually means less consumer buying power and therefore less production. Computer production must walk the line between supply, demand and competitive pricing to strike the right balance for production.

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