Factor markets

Factor markets are venues where the inputs (factors of production) needed to make goods and services are bought and sold. These inputs include labor (workforce), land, capital (machinery, equipment), and entrepreneurship. Businesses compete to hire these factors from suppliers, such as workers and landowners, who seek to earn income, like wages, rent, or profits. Essentially, factor markets connect those who provide resources with businesses that need them to produce products, balancing supply and demand to determine prices like wages and rent.