factor market

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Factor Market

The market for the means of production. That is, the factor market is the buying and selling of land, labor and capital, as well as raw materials and entrepreneurship. The most important component of the factor market is labor. See also: Factor Income.

factor market

a market in which FACTORS OF PRODUCTION are bought and sold and in which the prices of labour and other FACTOR INPUTS are determined by the interplay of demand and supply forces. See LABOUR MARKET, CAPITAL MARKET, COMMODITY MARKET, DERIVED DEMAND, MARGINAL PHYSICAL PRODUCT, MARGINAL REVENUE PRODUCT, PRICE SYSTEM. factors of production the resources that are used by firms as FACTOR INPUTS in producing a good or service. There are three main groups of factor inputs: NATURAL RESOURCES, LABOUR and CAPITAL.

Factors of production can be combined together in different proportions to produce a given output (see PRODUCTION FUNCTION); it is assumed in the THEORY OF THE FIRM that firms will select that combination of inputs for any given level of output that minimizes the cost of producing that output (see COST FUNCTION). See ENTREPRENEUR, MOBILITY.

References in periodicals archive ?
Factor markets exist so firms may acquire the resources necessary to operate their businesses (Barney 1986).
Economic Development in Central Asia: Institutional Underpinnings of Factor Markets
This will result in: 174,000 loans provided to micro enterprises; 5,500 loans provided to small and medium enterprises; 3,133 firms benefitting from reformed registration requirements; 2,500 individuals with improved financial and entrepreneurial skills; and 10% reduction in the average cost of complying with business regulation, helping to overcome government and market failures in business regulatory and tax frameworks, and labour and capital factor markets.
The terms inputs, factors and resources interchangeably refer to items available in factor markets, as suggested in Markman, Gianiodis & Buchholtz, 2009, p.
THIS WEEK'S X Factor markets were in a state of confusion last night as doubts persisted over whether Lucy Spraggan would be able to take part, writes Lucy Conquest.
It suggested limiting the role of government in goods and factor markets and strengthening the role of private sector enterprises through rewarding ideas-led innovation.
The volume's 17 chapters are arranged into sections on the methodology of microeconomic policy; demand, supply, markets, and policy; imperfect markets; factor markets and policy; public choice; and global applications.
Environmental Policy, International Trade and Factor Markets C.
This approach allows us to maintain the consistency or the symmetry in the treatment of the product and factor markets.
A main purpose of this research has been to investigate the relationship between choice of trade strategy, domestic factor markets, and the rate of growth of non-agricultural employment in developing countries.
Finally, Mexico needs to implement structural reforms in the areas of energy and labor sectors to improve its competitiveness, growth potential, and the flexibility of its factor markets.