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Abstract

All the inputs used in the growing of a crop can be classified under three categories — capital, land and labour. These are the resources or factors of production. A price is paid for the use of each of them determined by a supply and demand interaction but all are scarce in supply. The prices of capital, land and labour are called interest, rent and wages, respectively. A grower invests his capital in an area of land and further introduces his own or borrowed capital in seeds, fertilisers and tools. He makes these productive by the application of his own or purchased labour. All are involved in production but we consider them separately here for convenience.