Question

In the production process, the capital that is consumed by the economy or a firm is called

A Production Cost Correct Answer Incorrect Answer
B Depreciation Correct Answer Incorrect Answer
C Capital Loss Correct Answer Incorrect Answer
D Dead-Weight Loss Correct Answer Incorrect Answer

Solution

The capital that is consumed by an economy or a firm in the production process is known as Depreciation. In economics, depreciation is the gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.

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