• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Finance Train

Finance Train

High Quality tutorials for finance, risk, data science

  • Home
  • Data Science
  • CFA® Exam
  • PRM Exam
  • Tutorials
  • Careers
  • Products
  • Login

Types of Markets in Economics

CFA® Exam Level 1, Economics

Demand and Supply Types of Markets in Economics

There are two types of markets where factors of production (such as land, labor, and capital) and products are bought and sold. These are:

  • Factor Market
  • Product Market

Factor Market

Factor markets allocate the factors of production to the owners of businesses. It’s a place where the factors of production are bought and sold. These factors can be labor, real estate, crude oil or machinery used to produce final goods. In the factor market the labour and land is provided by the consumers to firms and capital goods such as machinery are provided by other firms. Firms are generally the buyers in factor markets.

Product Market

This is the place where finished goods and services are bought and sold.  Examples include grocery stores, accounting services, liquor, and new car dealers.

The consumers earn income from the factor markets and use this income to purchase goods and services in product markets.

Some companies produce goods that are used as an input in the production of other final products. Such goods are called intermediate goods. For example, some car manufacturers buy engines that are intermediate goods from other producers. Similarly, sugar when sold directly to consumers via a grocery store is a final good. However, when sugar is used by a chocolate manufacturer, it’s an intermediate good.

Financial Markets

Apart from factor markets and product market, we also have the financial markets that channel savings from individuals and firms having surplus money to those needing more funds. This is the place where firms raise money through equity and debt.

Back to Course
Next Lesson

Primary Sidebar

In this Course

Course Home
Types of Markets in Economics
Demand Function and Demand Curve
Supply Function and Supply Curve
Shifts in Demand and Supply Curves
Aggregating Demand and Supply Curves and Concept of Equilibrium
Excess Demand and Excess Supply
Stable and Unstable Equilibrium
Types of Auctions
Four Methods of Distributing Government Securities
Consumer and Producer Surplus
Effects of Government Regulation on Demand and Supply
Price Elasticity of Demand
Income Elasticity of Demand
Cross Price Elasticity of Demand
Return to Demand and Supply

Latest Tutorials

    • Data Visualization with R
    • Derivatives with R
    • Machine Learning in Finance Using Python
    • Credit Risk Modelling in R
    • Quantitative Trading Strategies in R
    • Financial Time Series Analysis in R
    • VaR Mapping
    • Option Valuation
    • Financial Reporting Standards
    • Fraud
Facebook Group

Membership

Unlock full access to Finance Train and see the entire library of member-only content and resources.

Subscribe

Footer

Recent Posts

  • How to Improve your Financial Health
  • CFA® Exam Overview and Guidelines (Updated for 2021)
  • Changing Themes (Look and Feel) in ggplot2 in R
  • Coordinates in ggplot2 in R
  • Facets for ggplot2 Charts in R (Faceting Layer)

Products

  • Level I Authority for CFA® Exam
  • CFA Level I Practice Questions
  • CFA Level I Mock Exam
  • Level II Question Bank for CFA® Exam
  • PRM Exam 1 Practice Question Bank
  • All Products

Quick Links

  • Privacy Policy
  • Contact Us

CFA Institute does not endorse, promote or warrant the accuracy or quality of Finance Train. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Copyright © 2021 Finance Train. All rights reserved.

  • About Us
  • Privacy Policy
  • Contact Us