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The production function takes the general form Y=f(K, L), where Y is the amount of output produced, K is the amount of capital stock used and L is the amount of labor used.

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"Physical" is used to distinguish physical capital from human capital (a result of investment in the human agent)), circulating capital, and financial capital.[1][2] "Physical capital" is fixed capital, any kind of real physical asset that is not used up in the production of a product.

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In economics, physical capital or just capital is a factor of production (or input into the process of production), consisting of machinery, buildings, computers, and the like.


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