PDSnet Glossary

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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

A market for one of the factors of production. Traditionally in economics there are four factors of production identified - labour, land, capital and entrepreneurial ability. Each of these factors has a market within the economy. So, in the labour market, people sell their labour and negotiate wages and salaries sometimes through a collective bargaining process. The market for land is operated on a supply and demand basis with price as the equilibrating force. The market for capital has interest as its price and interest rates vary depending on the credit worthiness of the borrower and the duration of the loan. Finally, entrepreneurial ability is constantly sought after with top managers commanding high salaries and remuneration packages.

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