ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -"Factor market” is a term economists use for all of the resources that businesses use to purchase, rent, or hire what they need in order to produce goods or services. Those needs are the factors of production, which include raw materials, land, labor, and capital. The factor market is also called the input market.

Detailed explanation-2: -Households, in the Resource Market (factor market), are the owners of the productive resources (factors of production) in the circular flow model. They sell their land, labor, capital, and entrepreneurship to businesses (firms) in the Resources Market in exchange for income payments.

Detailed explanation-3: -A factor market is a market where means, or factors, of production are exchanged. Another term for factor market is input market. Typically, companies will buy and sell the resources that they need to produce goods and services for their end-users.

Detailed explanation-4: -The factor market, or resource market, is where resources to create products are bought and sold, including factors of production like natural resources, labor, capital, and entrepreneurship. Factor markets can include labor markets and land markets.

Detailed explanation-5: -In economics, a factor market is a market where factors of production are bought and sold. Factor markets allocate factors of production, including land, labour and capital, and distribute income to the owners of productive resources, such as wages, rents, etc.