Economics 2281 · O Level · The factors of production

The factors of production — practice question

A firm offers a personal service to its customers. It prefers to stay labour-intensive instead of switching to production that is more capital-intensive. Which aspect of being labour-intensive would justify this decision?

  • ACustomer satisfaction is higher.
  • BProduction costs are higher.
  • CProduction is less flexible.
  • DQuality of customer service is worse.

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