Economics: Product Market and Factor Market

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Market
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A thing or place that brings together buyers and sellers (where goods and services are sold to consumers that want to buy goods)
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Consumers
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People (buyers) that demands goods and services and want to buy them from firms or individuals (sellers)
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Firms
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Businesses that sells goods or services to consumers
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Demand
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Can only exist if consumers are both able and willing to buy goods and services
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Market economy
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Determined by price
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Law of demand
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All things being equal, the lower the price for a good, the higher the quantity demanded will be for that good
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Law of supply
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All things being equal, the higher the price for a good, the more sellers will be able to supply that good
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Product market
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Where households purchase goods for personal use from firms. Brings together buyers and sellers of goods and services.
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Factor market
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Households buy goods and services, supply firms with labor to produce goods and services
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Factors of Production (production materials)
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Land, labor, capital, & entrepreneurs

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