Factor market

From Conservapedia
Jump to: navigation, search

In economics, a factor market is a market for factors of production. It is a reversal of the general setup of markets in that producers function as buyers, with other producers or households and consumers functioning as sellers. The market for labor is an example of a factor market, where the wage rate is equal to the value of the marginal product of labor for the last worker employed in the industry as a whole.