Crude Oil Is Not an Example of a Factor of Production

question 14

True/False

Crude oil is not an example of a factor of production, but when crude oil is processed into petrol, it is a factor of production.

---

Definitions:

Producer Surplus

The additional revenue producers earn by selling a product at a market price above their minimum acceptable price.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy.

Low Supplier Power

Refers to a market condition where suppliers have limited control over the price and terms of products and services due to high competition or low demand.

Threat from Substitutes

The potential for consumers to switch to alternative products that fulfill the same need, affecting demand.