Factor Market

Factor Market

Factor Market Jonathan Poland

The factor market, also known as the input market, is the market where the factors of production are bought and sold. The factors of production are the resources used to produce goods and services, including land, labor, and capital. In the factor market, these resources can be rented, leased, or purchased by businesses and organizations. The factor market is an essential component of the economy, as it allows businesses to access the resources they need to produce goods and services. This market is often studied in the field of economics, and plays a key role in the allocation of resources and the determination of prices.

The factor market is a concept that is often associated with simplistic and outdated economic models that view the economy as consisting of producers who buy unfinished inputs and consumers who buy finished goods. This narrow focus on the manufacturing sector ignores the complexity and diversity of modern economies. For example, the knowledge economy may require very few factors of production beyond labor, and the service economy often relies on the purchase of finished goods. Additionally, it is increasingly common for consumers to participate in production and for firms to purchase consumer goods. These developments highlight the limitations of the factor market model and the need for more nuanced and comprehensive approaches to understanding economic systems.

The following are common elements of the factor market.

  • Buildings
  • Business Services
  • Components
  • Electricity
  • Equipment Information
  • Technology Services
  • Infrastructure
  • Inventory
  • Labor
  • Land
  • Machines
  • Materials
  • Natural Resources (e.g. water)
  • Outsourcing
  • Parts
  • Vehicles

Content Database

Grand Strategy Jonathan Poland

Grand Strategy

A grand strategy is a comprehensive and long-term plan of action that encompasses all available options and resources in order…

Examples of Capital Intensive Jonathan Poland

Examples of Capital Intensive

An industry, organization, or activity that is capital intensive requires a large amount of fixed capital, such as buildings and…

Professionalism Jonathan Poland


Professionalism is the practice of following the standards and expectations of one’s profession, organization, and role. It involves upholding the…

Problem Management Jonathan Poland

Problem Management

Problem management is an important aspect of IT service management that involves identifying, analyzing, and resolving problems that can impact…

What is Supply? Jonathan Poland

What is Supply?

Supply refers to the amount of a product or service that is available for purchase at a given price. In…

Original Equipment Manufacturer Jonathan Poland

Original Equipment Manufacturer

An OEM (original equipment manufacturer) is a company that produces parts or equipment that is used in the manufacture of…

Technology Skills Jonathan Poland

Technology Skills

Technology skills refer to the talents and abilities related to information technology and physical technology, such as machines. This includes…

Knowledge Transfer Jonathan Poland

Knowledge Transfer

Knowledge transfer is the process of transferring knowledge, skills, and information from one person or group to another. It is…

Sticky Prices Jonathan Poland

Sticky Prices

Sticky prices are a common phenomenon in many markets, and they can have a significant impact on the overall economy.…