2025

I. ENTREPRENEURSHIP
AND
DEVELOPMENT

ENGR. DONABEL B. RICARDO

Instructor I

LEARNING CONTENT:

Lesson 1: Concept and Theories of Entrepreneurship

Lesson 2: Social and Economic Impact of Entrepreneurship
Lesson 3: Stakeholders / Organization Behind Development
Of Entrepreneurship

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“What do you think

entrepreneurship means
beyond just starting a
business?”

LEARNING CONTENT:

Lesson 1: Concept and Theories of Entrepreneurship

Lesson 2: Social and Economic Impact of Entrepreneurship
Lesson 3: Stakeholders / Organization Behind Development
Of Entrepreneurship

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CONCEPT AND
THEORIES OF
ENTREPRENEURSHIP

CONCEPT OF ENTREPRENEURSHIP

ENTREPRENEUR

- The term ‘entrepreneur’ is derived from the French verb

‘enterprendre’ means ‘to undertake’.
- is someone who recognizes a problem or an idea that no one else
has noticed and takes action on it.

- An individual who owns or starts a business that is already

existing is referred to as businessmen.

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CONCEPT OF ENTREPRENEURSHIP

ENTREPRENEURSHIP

- act of being an entrepreneur

- Entrepreneurship is the process of identifying,
developing, and bringing a business idea to life by
taking financial risks.

CONCEPT OF ENTREPRENEURSHIP

Key Components:

➢ Innovation – Creating new products, services, or processes.

➢ Risk-taking – Investing resources with the hope of profit.
➢ Value Creation – Generating economic or social value.

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CONCEPT OF ENTREPRENEURSHIP

THEORIES OF ENTREPRENEURSHIP

Economic Theories
• Schumpeter’s Innovation Theory (Schumpeter, 1934) – Entrepreneurs
drive economic development by introducing new products, methods,
and markets.
Example: Elon Musk’s Tesla revolutionized the electric vehicle industry.
• Kirzner’s Entrepreneurial Discovery Theory (Kirzner, 1973) –
Entrepreneurs identify and exploit market opportunities that others
overlook.
Example: Airbnb recognized the demand for affordable, home-based
lodging.

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THEORIES OF ENTREPRENEURSHIP

Psychological Theories
• McClelland’s Need for Achievement Theory (McClelland, 1961) –
Entrepreneurs are motivated by personal achievement rather than
financial rewards.
Example: Jeff Bezos founded Amazon driven by innovation and
customer service excellence.
• Locus of Control Theory (Rotter, 1954) – Entrepreneurs believe they
control their own success rather than external factors.
Example: Self-made billionaires like Oprah Winfrey embody this theory.

THEORIES OF ENTREPRENEURSHIP

Sociological Theories

• Max Weber’s Social Change Theory (Weber, 1905) – Cultural and

religious values influence entrepreneurship.

Example: Silicon Valley’s work ethic promotes continuous

technological advancement.

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LEARNING CONTENT:

Lesson 1: Concept and Theories of Entrepreneurship

Lesson 2: Social and Economic Impact of Entrepreneurship
Lesson 3: Stakeholders / Organization Behind Development
Of Entrepreneurship

Social and Economic

Impact of
Entrepreneurship

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SOCIAL AND ECONOMIC IMPACT OF

ENTREPRENEURSHIP
Economic Impact of Entrepreneurship:

•Job Creation and employment:

Entrepreneurs establish businesses that hire employees, reducing
unemployment rates.
•Innovation & Technological Advancement:
Startups introduce new ideas, products, and services that improve
efficiency.
•GDP Growth & Wealth Creation:
Increased business activity contributes to national income trough
exports, taxation and economic expansion.

SOCIAL AND ECONOMIC IMPACT OF

ENTREPRENEURSHIP
Social Impact of Entrepreneurship:

• Improved Standard of Living:

More businesses mean better access to goods and services.
• Social Entrepreneurship:
Businesses that focus on social impact rather than just profit.
• Empowerment of Communities
Women and minority entrepreneurs contribute to social progress.
• Solving Social Problems
Social enterprises tackle global issues (e.g., renewable energy, food
security).

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LEARNING CONTENT:

Lesson 1: Concept and Theories of Entrepreneurship

Lesson 2: Social and Economic Impact of Entrepreneurship
Lesson 3: Stakeholders / Organization Behind Development
Of Entrepreneurship

Stakeholders /
Organization Behind
Development Of
Entrepreneurship

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KEY STAKEHOLDERS IN ENTREPRENEURSHIP

DEVELOPMENT

Government Agencies

- Develop policies, regulations, and incentives to promote business

growth.
Example:
Department of Trade and Industry (DTI) – Provides training, funding,
and business support.
Small Business Administration (SBA, USA) – Offers loans and
resources for entrepreneurs.
Startup India Initiative (India) – Supports entrepreneurs through tax
incentives and funding.

KEY STAKEHOLDERS IN ENTREPRENEURSHIP

DEVELOPMENT

Financial Institutions & Investors

- Banks, microfinance institutions, venture capitalists provide

capital.
Example:
Angel Investors & Venture Capitalists – Provide early-stage funding
(e.g., Sequoia Capital funded Apple).

Banks & Microfinance Institutions – Help small businesses access

credit.

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KEY STAKEHOLDERS IN ENTREPRENEURSHIP

DEVELOPMENT

Educational Institutions & Incubators

- Universities offer business courses, training, and mentorship.

Example:
University-Led Entrepreneurship Programs – Encourage students to
launch startups.

Incubators & Accelerators – Offer mentorship, funding, and

networking (e.g., Y Combinator, Techstars).

KEY STAKEHOLDERS IN ENTREPRENEURSHIP

DEVELOPMENT

Private Sector & NGOs:

- Corporations and non-profits support entrepreneurship through

accelerators, partnerships, and mentorship.

Global Organizations:

- World Bank, UNDP, and WTO promote entrepreneurship in

developing countries.

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II. ENTREPRENEURSHIP
AND PERSONALITY

LEARNING CONTENT:

Lesson 1: Entrepreneurship, personality, characteristics and

competencies
Lesson 2: Personal entrepreneur’s benefits

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES

Personality:
- A combination of traits, behaviors, and emotional patterns
that influence how a person interacts with the world.

Why it matters:
Entrepreneurs face uncertainty and challenges, so their
personality affects their success.

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES

How Personality Affects Entrepreneurship:

- Entrepreneurs with strong personalities are more likely to take

initiative, persist through challenges, and build successful
businesses.

- Personality influences how entrepreneurs make decisions, take

risks, and handle stress.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Key Entrepreneurial Personality Traits
✓ Self-Confidence – Belief in one’s abilities to achieve goals.
✓ Risk-Taking – Willingness to take calculated risks for potential
rewards.
✓ Innovativeness – Thinking creatively to develop new ideas or
products.
✓ Proactiveness – Taking initiative and acting on opportunities before
competitors.
✓ Resilience – Ability to recover quickly from setbacks and failures.
✓ Leadership – Motivating and guiding a team towards success.

CHARACTRISTICS OF AN ENTREPRENEUR

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Risk-Taking 🚀
-Entrepreneurs are willing to take financial and strategic risks
without guaranteed success.
-They invest their time, money, and effort into new ideas and
businesses

📌 Why It Matters:
Without risk-taking, businesses wouldn’t innovate or grow.

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Innovation & Creativity 🎨
-Entrepreneurs think outside the box to develop new products,
services, or business models.
-They solve problems creatively and find ways to improve existing
solutions.

📌 Why It Matters:
Creativity leads to market differentiation and competitive
advantage.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Perseverance & Resilience 💪
Entrepreneurship is full of failures and setbacks. Successful
entrepreneurs never give up and learn from mistakes.

📌 Why It Matters:
Resilient entrepreneurs keep pushing forward, even when faced
with obstacles

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Proactiveness & Initiative 🔥
-Entrepreneurs take action instead of waiting for opportunities.
-They identify trends and gaps in the market before others do.

📌 Why It Matters:
Being proactive helps entrepreneurs stay ahead of the
competition.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Self-Confidence & Decisiveness 💡
-Entrepreneurs believe in their ideas and make bold decisions.
-They trust their instincts and take calculated risks.

📌 Why It Matters:
Confidence helps entrepreneurs attract investors, customers, and
employees.

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Leadership & Team Management 👥
-Successful entrepreneurs inspire and lead their teams.
-They delegate tasks and create a strong business culture.

📌 Why It Matters:
Strong leadership drives team motivation and company success.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Adaptability & Flexibility 🔄
-The business world is always changing. Entrepreneurs must adjust
their strategies based on market trends.

📌 Why It Matters:
Businesses that fail to adapt quickly become irrelevant

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Strong Work Ethic & Commitment ⏳
-Entrepreneurs work long hours and stay dedicated to their
goals.
- They put in extra effort to make their businesses successful.
📌 Why It Matters:
Hard work separates successful entrepreneurs from those
who give up easily.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ 9. Networking & Communication Skills 📞
-Entrepreneurs build relationships with investors, customers, and
business partners.
-They communicate effectively to sell their vision.
📌 Why It Matters:
A strong network helps entrepreneurs gain support,
funding, and opportunities.

ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Characteristics of a Successful Entrepreneur
✅ Financial & Business Management Skills 💰
-Entrepreneurs must understand finance, budgeting, and investment
to run a profitable business.
- Managing cash flow and business expenses is crucial.
📌 Why It Matters:
Poor financial management leads to business failure, even
with a great idea.

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ENTREPRENEURSHIP, PERSONALITY,
CHARACTERISTICS, AND COMPETENCIES
Entrepreneurial Competencies:
✓ Opportunity-Seeking and Initiative – Identifying and capitalizing on
business opportunities.
✓ Persistence – Continuing despite obstacles.
✓ Risk Management – Assessing and handling business risks.
✓ Financial Literacy – Managing budgets, profits, and investments
effectively.
✓ Problem-Solving Skills – Finding creative solutions to challenges.

LEARNING CONTENT:

Lesson 1: Entrepreneurship, personality, characteristics and

competencies
Lesson 2: Personal entrepreneur’s benefits

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PERSONAL BENEFITS OF BEING AN ENTREPRENEUR

📌 Why Become an Entrepreneur?

Financial Independence – Earn money based on effort and ideas

rather than a fixed salary.
Flexibility & Work-Life Balance – Set your own schedule and
work on your own terms.
Personal Growth & Learning – Entrepreneurs constantly learn
new skills.
Creativity & Freedom – Build something unique without
restrictions.

PERSONAL BENEFITS OF BEING AN ENTREPRENEUR

📌 Why Become an Entrepreneur?

Making an Impact – Create jobs, solve problems, and contribute

to society.
Job Security – Instead of depending on employers, entrepreneurs
create their own opportunities.
Recognition & Satisfaction – Seeing an idea turn into a
successful business is rewarding.

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III. VALUE PROPOSITION

CANVAS (VPC) AND
BUSINESS MODEL CANVAS
(BMC)

LEARNING CONTENT:

Lesson 1: Definition of Terms

Lesson 2: Importance of VPC and BMC on Entrepreneurship
Lesson 3: Creating VPC and BMC

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DEFINITION OF TERMS

a. What is the Value Proposition Canvas (VPC)?

Value Proposition Canvas (VPC)

is a tool used to:
a) Understand customer needs, pains, and gains.
b)Design products/services that solve customer problems.

Two main sections of VCP:

1. Customer Profile
2. Value Proposition

DEFINITION OF TERMS

a. What is the Value Proposition Canvas (VPC)?

Two main sections of VCP:

1. Customer Profile
▪ Customer Jobs – Tasks the customer wants to accomplish.
▪ Pains – Problems, challenges, and frustrations.
▪ Gains – Positive outcomes customers want.
2. Value Proposition
▪ Products & Services – Offerings that address customer jobs.
▪ Pain Relievers – Solutions to customer frustrations.
▪ Gain Creators – Added benefits for customers.

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DEFINITION OF TERMS

b. What is the Business Model Canvas (BMC)?

The Business Model Canvas (BMC) is a strategic tool that

describes how a business creates, delivers, and captures value.

DEFINITION OF TERMS

b. What is the Business Model Canvas (BMC)?

It consists of nine key building blocks:
1. Customer Segments – Who are your customers?
2. Value Propositions – What value do you offer?
3. Channels – How do you reach customers?
4. Customer Relationships – How do you interact with customers?
5. Revenue Streams – How do you generate revenue?
6. Key Resources – What assets are needed?
7. Key Activities – What tasks must be done?
8. Key Partnerships – Who are your business partners?
9. Cost Structure – What are the major costs?

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LEARNING CONTENT:

Lesson 1: Definition of Terms

Lesson 2: Importance of VPC and BMC on Entrepreneurship
Lesson 3: Creating VPC and BMC

IMPORTANCE OF VPC AND BMC IN

ENTREPRENEURSHIP
Why are these tools important?
▪ Ensures a clear understanding of customer needs –
Entrepreneurs must know their target market before launching a
business.
▪ Helps refine business ideas – By identifying pain points and
value propositions, businesses can improve their offerings.
▪ Provides a structured approach to business planning – BMC
serves as a roadmap for startups.
▪ Attracts investors and partners – A well-defined business model
makes funding easier.
▪ Reduces risks and increases chances of success – Understanding
value creation minimizes failure.

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LEARNING CONTENT:

Lesson 1: Definition of Terms

Lesson 2: Importance of VPC and BMC on Entrepreneurship
Lesson 3: Creating VPC and BMC

CREATING VPC AND BMC

Step-by-Step Guide to Creating a VPC and BMC

1. Select a Business Idea – (e.g., Coffee Shop, Online Clothing Store,

Mobile App).
2. Identify the Target Customer Segment – Who are your customers?
What are their pains and needs?
3. Define the Value Proposition – What makes your business
unique?
4. Use the VPC Template to map out gains, pains, and solutions.
5. Fill in the BMC Template using the nine building blocks.

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IV. ECONOMIC THEORIES,

PRINCIPLES, & CONCEPTS

LEARNING CONTENT:

Lesson 1: Economics Principles

Lesson 2: Law of Diminishing Return
Lesson 3: Factors of Production and Cost Function

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"Why do we
have to make
choices in life?"

WHAT IS
ECONOMICS?

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▪ comes from the Greek word “oikonomia” which means

“management of the household”.

Lionel Robbins
▪ is the study of how individuals and societies allocate scarce
resources to satisfy unlimited wants.
▪ is the science of scarcity and choice

AGRICULTURAL ECONOMICS
▪ is a field that applies economic
principles to the production,
distribution, and consumption
of agricultural goods and
services.
▪ is a study which applies the
analytical models of economics
to agricultural problems.

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ECONOMISTS OF
THE PASTS

John Maynard Keynes (1883–1946)

• The General Theory of Employment, Interest,
and Money (1936).
Key Distribution
• Keynesian Economics
• Aggregate Demand Theory
• Government Spending & Fiscal Policy
• Multiplier Effect
• Against Pure Free Markets
Relevance to Agricultural Economics:
•Government Subsidies & Price Supports
British economist •Rural Development Programs
• Food Security & Employment

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Adam Smith (1723–1790)

• Father of Economics
• "The Wealth of Nations“(1776)
Key Distribution
• Invisible Hand Theory
• Division of Labor
• Free Markets & Laissez-Faire Economics
• Value and Wealth
• Critique of Mercantilism

Scottish economist and philosopher

Adam Smith (1723–1790)

Relevance to Agricultural Economics:
• Supported free trade in agricultural
goods, opposing tariffs and
restrictions.
• Recognized agriculture as a key sector
but saw manufacturing and trade as
equally important for national wealth.
• His ideas influenced later economists
like David Ricardo and John Stuart
Mill in shaping agricultural policies
and trade liberalization.

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David Ricardo (1772–1823)

Key Distributiona
▪ Comparative Advantage
▪ Labor theory of value
▪ Theory of Rent/Ricardian Equivalence
▪ Diminishing Returns in Agriculture
▪ Wages and Profits (Iron Law of Wages)
Relevance to Agricultural Economics:
• Explains why agricultural land earns rent
based on productivity.
• Highlights the importance of trade in
British economist and one of agricultural products.
the most influential figures in • Shows how diminishing returns affect farm
classical economics. profitability and food prices.

John Stuart Mill (1806–1873)

▪ was a British philosopher, economist,
and political thinker, known for his
contributions to classical economics
and liberal political theory.
Key Contributions:
• Principles of Political Economy (1848
• Utilitarianism
• Distinction Between Production &
Distribution
• Support for Cooperatives & Labor Unions
• Women’s Rights & Social Equality
• Environmental & Sustainable Growth

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John Stuart Mill (1806–1873)

Relevance to Agricultural Economics:
▪ Supported policies that promote fair land
distribution and better conditions for
farmers.
▪ Advocated for government intervention
when markets fail, especially in food
security and poverty reduction.
▪ His ideas on wealth distribution remain
relevant in modern debates on
agricultural subsidies, land reforms, and
rural development.

Karl Marx (1818–1883)

• German philosopher, economist, and
political theorist.
• Marxist economic theory.
Key Distribution
• Theory of Historical Materialism
• Labor Theory of Value
• Class Struggle
a. Bourgeoisie (Capitalists)
b. Bourgeoisie (Capitalists)
• Alienation of Labor
• Critique of Capitalism

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Karl Marx (1818–1883)

Relevance to Agricultural Economics:
• Theory of Historical Materialism
• Labor Theory of Value
• Class Struggle
a. Bourgeoisie (Capitalists)
b. Bourgeoisie (Capitalists)
• Alienation of Labor
• Critique of Capitalism

Thomas Malthus (1766–1834)

• British economist and demographer, best
known for his theory on population
growth and its relationship to resources.
Key Contributions:
• Malthusian Theory of Population
• Positive and Preventive Checks
a. Positive checks
b. Preventive checks
• Essay on Population
• Critique of Utopian Thinking
• Influence on Economic Thought

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Thomas Malthus (1766–1834)

Relevance to Agricultural Economics:

• Food Security
• Land and Resource Limitations
• Agricultural Innovation

ECONOMIC
PERSPECTIVE
Understanding How People
Make Choices

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Key Principles of the Economic Perspective

1. Scarcity and Choice

• Scarcity refers to the limited nature of
resources (such as money, time, land,
labor, and capital) relative to human
wants and needs.
• Because resources are limited, individuals
and societies must make choices about
how to use them efficiently.

Key Principles of the Economic Perspective

1. Scarcity and Choice

Key Points:

✅ Unlimited Wants vs. Limited Resources – People always

want more goods and services, but resources are not enough to
satisfy everyone’s needs.

✅ Trade-offs – Because of scarcity, choosing one option

means giving up another.

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The three fundamental questions:

QUESTION EXPLANATION EXPLANTION

1. What to produce? Which goods and Should a country focus

services should be on producing food or
produced? electronics?
2. How to produce? What methods will be Should factories use
used to produce goods human labor or
and services? machines?
3. For whom to Who will receive the Should healthcare be
produce? goods and services? free for everyone or
only for those who can
afford it?

Key Principles of the Economic Perspective

2. Opportunity Cost
• Opportunity Cost is the next best
alternative that is sacrificed when
making a choice.
• Every decision has a cost because
choosing one thing means giving
up something else.

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Key Principles of the Economic Perspective

2. Opportunity Cost
Key Points:
✅ All choices involve opportunity cost. If you spend
money on a vacation, you may give up the chance to buy a
new laptop.
✅ It is not just about money but also time, effort, and
resources.
✅ Smart decision-making considers opportunity costs
to maximize benefits.

Key Principles of the Economic Perspective

3. Rational Self-Interest

• People make rational decisions by weighing costs

and benefits to maximize their utility (satisfaction)
or profit.
• This does not mean people are selfish, but rather
that they make choices they believe will benefit
them the most.

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Key Principles of the Economic Perspective

4. Marginal Analysis
• Marginal analysis is the process of evaluating the
additional (marginal) benefits and costs of a decision.
• It helps individuals and businesses decide how much
more or less to produce, consume, or invest.

Key Principles of the Economic Perspective

4. Marginal Analysis
Key Points:
✅ Marginal Benefit (MB) – The additional gain from
consuming or producing one more unit of a good or service.
✅ Marginal Cost (MC) – The additional cost incurred from
consuming or producing one more unit.
✅ Rational Decision Rule:
If MB > MC, increase activity (it is worth doing more).
If MB < MC, decrease activity (it is not worth doing more).

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Key Principles of the Economic Perspective

4. Marginal Analysis
Example:
A farmer is considering using more fertilizer on crops.
•Marginal Cost: Buying and applying more fertilizer costs $100 per acre.
•Marginal Benefit: The extra fertilizer increases crop yield, generating an
extra $150 per acre.
•Since MB ($150) > MC ($100), the farmer should apply more fertilizer.
However, if applying even more fertilizer only increases revenue by $80
while costing $100, then MB < MC, and the farmer should stop.

LEARNING CONTENT:

Lesson 1: Economics Principles

Lesson 2: Law of Diminishing Return
Lesson 3: Factors of Production and Cost Function

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Law of Diminishing Return

• The Law of Diminishing Returns is a key economic

principle that explains the relationship between inputs and
output in the short run.

• It states that as additional units of a variable input (e.g., labor)

are added to a fixed input (e.g., land or machinery), the
marginal gain in output will eventually decrease.

Law of Diminishing Return

Key Features of the Law of Diminishing Returns

✅ Applies in the Short Run – At least one input (e.g., land

or capital) is fixed.
✅ Marginal Productivity Declines – Additional input
increases output at first, but after a point, efficiency drops.
✅ Does Not Mean Negative Output – Total production
may still rise, but at a slower rate.

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The Three Stages of Production Under the Law of

Diminishing Returns

LEARNING CONTENT:

Lesson 1: Economics Principles

Lesson 2: Law of Diminishing Return
Lesson 3: Factors of Production and Cost Function

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Factors of Production and Cost Function

Economics revolves around how resources are used to produce
goods and services efficiently. Two fundamental concepts that
help understand this process are:

❑ Factors of Production – The essential inputs required for

production.

❑ Cost Function – describes the relationship between the total

cost (TC) of production and the quantity of output (Q)
produced.

Factors of Production
They are classified into four main categories:
Factor Definition Example
Land 🌍 Natural resources used Farmland, water,
in production. minerals, oil
Labor 👨‍🏭 Human effort, both Factory workers,
physical and teachers, doctors
intellectual.
Man-made resources Machines, tools,
Capital 🏭
used for production. buildings, technology
Entrepreneurship 💡 Risk-taking and Steve Jobs (Apple), Elon
innovation in business. Musk (Tesla)

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Cost Function in Economics

Key Cost Concepts:
Cost Type Definition Example
Fixed Cost (FC) Costs that do not change Rent, salaries, insurance
with output.
Variable Cost (VC) Costs that change with Raw materials, wages
output. (per unit produced)
The sum of fixed and TC = FC + VC
Total Cost (TC)
variable costs.
Marginal Cost (MC) The additional cost of MC = ΔTC / ΔQ
producing one more unit.
Average Cost (AC) Cost per unit of output. AC = TC / Q

Relationship Between Factors of Production and Cost

Function
📌 How Do Factors of Production Affect Costs?

✅ Land → Higher land costs increase fixed costs.

✅ Labor → Higher wages increase variable costs.
✅ Capital → Investment in machines may increase fixed costs
but reduce variable costs in the long run.
✅ Entrepreneurship → Efficient management reduces overall
costs.

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REFERENCES:
• Mankiw, N. G. (2020). Principles of Economics (9th ed.).
• Cengage Learning.Samuelson, P., & Nordhaus, W. (2019).
• Economics (20th ed.). McGraw-Hill.Krugman, P., & Wells,
R. (2018). Microeconomics (5th ed.). Worth Publishers.

THANK
YOU

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