Which of the following would be a good argument for why a resource or capability is considered valuable in the context of factors of production?

• A. It is commonly available to all firms in the market.
• B. It increases the firm's costs without improving output.
• C. It does not contribute to the production process.
• D. It enables a firm to produce goods or services more efficiently than competitors.

Answer: (D)

Verified step by step guidance

1. Understand the concept of 'value' in the context of factors of production: a resource or capability is valuable if it helps a firm produce goods or services more efficiently or effectively.
2. Analyze each option by considering whether it improves the firm's ability to produce output or reduces costs relative to competitors.
3. Recognize that a resource commonly available to all firms is not a source of competitive advantage, so it is less likely to be considered valuable in this context.
4. Identify that a resource increasing costs without improving output or not contributing to production does not add value to the firm.
5. Conclude that the resource or capability is valuable if it enables the firm to produce goods or services more efficiently than competitors, thus providing a competitive advantage.