What is a key characteristic of a capital-intensive business?

A key characteristic of a capital-intensive business is that it incurs greater expenditure in capital than labor. This means that these businesses heavily invest in physical assets such as machinery, equipment, and technology to produce their goods or services. Industries like manufacturing, mining, and telecommunications often require significant upfront capital to establish the necessary infrastructure, leading to high operational costs associated with maintaining and utilizing these assets.

In contrast, businesses that do not focus on heavy capital investment may operate with fewer assets and rely more on human labor, which would be characterized by lower upfront costs. Understanding this distinction is crucial as it highlights how capital-intensive businesses operate and the types of resources they prioritize for production.