What is a key characteristic of capital-intensive production?

What is a key characteristic of capital-intensive production?

• A. High labor costs
• B. Advanced technology utilization
• C. Low overhead
• D. High employee turnover

Answer: (B)

A key characteristic of capital-intensive production is the utilization of advanced technology. In this type of production, businesses invest heavily in machinery, equipment, and technology to enhance efficiency and output. This often involves significant upfront investment, focusing on mechanization and automation, which allows companies to produce goods at a lower per-unit cost as production scales. In contrast, labor-intensive production relies more on human labor, which does not typically necessitate as much advanced technology. Instead of high labor costs, capital-intensive operations can lead to lower ongoing labor costs since the machinery can reduce the reliance on a large workforce. Overhead costs can vary, but they do not tend to be low in capital-intensive industries due to the high maintenance and operational costs associated with advanced technology. Employee turnover is not a defining factor in capital-intensive production; rather, stable, skilled labor is often preferred to manage the technology effectively.

A key characteristic of capital-intensive production is the utilization of advanced technology. In this type of production, businesses invest heavily in machinery, equipment, and technology to enhance efficiency and output. This often involves significant upfront investment, focusing on mechanization and automation, which allows companies to produce goods at a lower per-unit cost as production scales.

In contrast, labor-intensive production relies more on human labor, which does not typically necessitate as much advanced technology. Instead of high labor costs, capital-intensive operations can lead to lower ongoing labor costs since the machinery can reduce the reliance on a large workforce. Overhead costs can vary, but they do not tend to be low in capital-intensive industries due to the high maintenance and operational costs associated with advanced technology. Employee turnover is not a defining factor in capital-intensive production; rather, stable, skilled labor is often preferred to manage the technology effectively.