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What is Factor Market?

Category: Marketing

1Definition

A market where factors of production like labor, capital, and land are bought and sold.

2Context

Contrasts with product markets. Determines wages, rents, and interest rates.

3Example

The labor market is a factor market where workers sell their services to employers.

⚠Common Trap

Factor markets are interconnected—labor demand depends on product demand.

Related Terms

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More Marketing Terms

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