The real process and income distribution process can be identified and measured by extra calculation, and this is why they need to be analyzed separately in order to understand the logic of production and its performance. The production process and its sub-processes, the real process and income distribution process occur simultaneously, and only the production process is identifiable and measurable by the traditional accounting practices. Production output is created in the real process, gains of production are distributed in the income distribution process and these two processes constitute the production process. The customersвЂ™ well-being arises from the commodities they are buying and the suppliersвЂ™ well-being is related to the income they receive as compensation for the production inputs they have delivered to the producers. Consumers can be both customers of the producers and suppliers to the producers. In the interaction, consumers can be identified in two roles both of which generate well-being. Well-being is made possible by efficient production and by the interaction between producers and consumers. Similarly there are two kinds of actors, producers and consumers.

The most important forms of production are market production public production household production In principle there are two main activities in an economy, production and consumption. They are improving quality-price-ratio of goods and services and increasing incomes from growing and more efficient market production. In production there are two features which explain increasing economic well-being. The degree to which the needs are satisfied is often accepted as a measure of economic well-being. Economic well-being is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human wants and needs. It is the act of creating output, a good or service which has value and contributes to the utility of individuals.

Home Adam smith capital asset depreciation durable good economics goods non-renewable resource physical capital production service stock Production is a process of workers combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output).

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