The primary difference between product markets and factor markets is that

A. product markets are markets for goods, while factor markets are markets for factors of productionlong dash labor, capital, natural resources, and entrepreneurial ability.

B. product markets are generally after factor markets in the distribution chain.

C. product markets are markets for factors of productionlong dash labor, capital, natural resources, and entrepreneurial ability, while factor markets are markets for goods and services.

D. product markets produce goods for final sale while the output of factor markets is included in the purchase price of the good itselflong dashfactors are not sold.

Question

Business

King

19 February, 08:01

The primary difference between product markets and factor markets is that

A. product markets are markets for goods, while factor markets are markets for factors of productionlong dash labor, capital, natural resources, and entrepreneurial ability.

B. product markets are generally after factor markets in the distribution chain.

C. product markets are markets for factors of productionlong dash labor, capital, natural resources, and entrepreneurial ability, while factor markets are markets for goods and services.

D. product markets produce goods for final sale while the output of factor markets is included in the purchase price of the good itselflong dashfactors are not sold.

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Answers (1)

Know the Answer?

Reilly Palmer · Answer 1

Answer: Option (A) is correct.

Explanation:

The product market is the market where there is a buying and selling of goods.

Factor markets are the markets where there is a buying and selling of inputs that are used in the production.

Above is the primary difference between the product and factor market.

Product markets include sale and purchase of all the finished goods except raw material, intermediate goods.

Factor markets include capital, labor, land, raw materials, intermediate goods. All these factors are used in the production of final goods.