Factor Market

See: Factor. See: Factors of Production.

Economists love to make categories. One of the those groupings is referred to as the "factors of production." It represents the stuff that goes into making things. Think: labor, raw materials, physical capital, etc.

A factor market is a market where these factors are traded. The labor market would represent a prime example. Workers look for a job. Companies search out the most competent workers at the best price. They find each other in the labor market.