A number of factors, such as land and labor, are used in the production process. It is important to examine the contributions or returns to these factors so that a farmer may assess the benefits of using an additional unit of a factor when there are competing wants.
Returns to land, labor, and capital relate to profitability. These metrics enable one to assess the opportunity cost of the resource, which may be even more influential than overall profitability when the resource is the most limiting factor.
