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Give Reason Or Explain: Raw Material is Considered as a Variable Capital. - Economics

Short Note

Give reason or explain:

Raw material is considered as a variable capital.

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Solution

Variable capital refers to the capital whose demand changes over time. In other words, it refers to the capital that is used in the process of production only once. Since the demand for raw materials changes overtime, and it is used in the process of production only once, it can be considered as a variable capital.

Concept: Factors of Production - Feature of Capital
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 7 Factors of Production
Exercise | Q 2.4 | Page 60
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