Final answer:
Wear and tear is not an economic factor related to depreciation; it is a physical factor. Inadequacy, obsolescence, and supersession are economic factors that contribute to an asset's depreciation over time. Planned obsolescence is a business strategy where a product is designed to become obsolete after a certain period to encourage repurchase.
Step-by-step explanation:
All of the following are economic factors related to depreciation except: Wear and tear. In accounting and business contexts, depreciation is the reduction in the value of an asset over time due primarily to use and exposure to the elements. Inadequacy, obsolescence, and supersession are all factors of economic depreciation. Inadequacy refers to an asset no longer being sufficient for its intended use. Obsolescence describes an asset becoming outdated due to new advancements or changes in market preference. Supersession happens when a newer, improved version of an asset is available, making the older one less valuable.
Wear and tear, however, is a physical factor that refers to the normal degradation of an asset from routine use over time, not directly an economic factor, although it certainly leads to a decline in an asset’s economic value.
The concept of planned obsolescence is closely related to economic factors of obsolescence. It is when a product is designed with a limited useful life, so consumers will need to purchase a replacement after a certain period. This tactic ensures ongoing demand for the product as older versions become obsolete or fail. An example of this is a cell phone using outdated technology within a year or two of purchase, prompting the consumer to upgrade to a new model.