For most firms in the economy, the largest part of factor costs is the cost of
A)labor.
B)capital.
C)property and machinery.
D)land and natural resources.

Question

Quizplus · Accepted Answer

Labor costs are typically the largest factor cost for most firms in the economy. This is because labor is a necessary input for most production processes and because wages and salaries are a major expense for businesses. While the cost of capital, property and machinery, and land and natural resources can be significant for some firms, they are generally not as large as labor costs in terms of overall factor costs.

For Most Firms in the Economy, the Largest Part of Factor