Resource Mix and Technology

Every business must decide the combination of labour and capital it uses to produce goods and services. This decision — known as the resource mix — has profound implications for costs, flexibility, quality, and the nature of work. In recent decades, advances in technology have fundamentally shifted this balance, with automation and digitalisation replacing many tasks previously performed by human workers.

Key Definition: The resource mix (also called the factor mix) is the combination of labour (human workers) and capital (machinery, technology, equipment) that a business uses to produce its output.

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Labour-Intensive vs Capital-Intensive Production