Factors of production are the goods and/or services used in production. The major factors of production are land, labor, capital and entrepreneurship. Remuneration for the usage of land is paid in the form of rent, for labor in the form of wages, for capital as interest, and for entrepreneurship profit is the reward. According to traditional analysis, determination of factor prices is different
. from the determination of product pricing. This is because the demand for a factor of production is derived demand and also has joint demand along with other factors of production.
