Faktormärkten

Faktormärkten, or factor markets, are the markets where inputs used in production are bought and sold. The main factors are labor, capital, land and natural resources, and entrepreneurship. Households supply these factors; firms demand them. Prices for these inputs—wages, returns on capital, rents, and profits—allocate resources to their most valued uses. Factor markets complement product markets, which trade final goods and services.

Labor market. Supply comes from workers offering time and skills; demand from firms needing labor. Wages reflect shifts in demand and supply, plus frictions and policy instruments such as minimum wage and collective bargaining. Employment outcomes depend on cyclical conditions, skill matching, and mobility, as well as institutions and regulations that affect hiring and firing.

Capital and land. Capital markets price the use of physical and financial capital through returns and interest rates; savings supply funds for investment, supporting growth and productivity. Land and natural resources are priced by rents and royalties, reflecting scarcity and alternating uses. Entrepreneurship yields profits and carries risk, influencing investment decisions and innovation.

Pricing framework and deviations. In the standard marginal productivity theory, each factor is paid the value of its marginal product. In practice, factor prices can diverge due to imperfect competition, information asymmetries, mobility constraints, and institutional factors. Regulation, unions, globalization, and technology can shift demand and supply in factor markets, impacting income distribution, efficiency, and economic growth.