FACTORS THAT DETERMINE THE VOLUME OF PRODUCTION. The amount capital available to a producer determines the volume of Production. The greater the amount of capital available, the higher the volume of production.
FACTORS THAT DETERMINE THE VOLUME OF PRODUCTION
(2) Availability of raw materials:
The raw materials available will determine the volume of production. The more the raw materials available, the greater the volume of production.
The management put in place for the production of goods and services determines the volume production. Efficient management will
increase the volume of production.
(4) The market size:
The size of the market refers to the demand for goods produced. The greater the demand for the goods, the greater the volume of production.
(5) Efficiency of other factors of production:
The more the efficiency of other factors of production, the more the increase in the volume of production.
(6) Level of technology:
The use of modern technology does lead to high volume of production as against the use of local technology, which can never increase the volume of production.
(7) Storage facilities:
When storage facilities are available for storing produced goods, this will encourage or lead to high volume of production.
(8) Nature of the goods:
If the goods produced are durable, they can be stored and this encourages high volume of production, but perishable goods which cannot be easily stored can lead to low volume of production.