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In which type of market do firms buy land, labour, capital and entrepreneurship?
AProduct market
BRetail market
CFactor market
DSpot market
Answer & Solution
Correct answer: C. Factor market
1. Factor markets are those in which firms buy the resources they need, namely land, labour, capital and entrepreneurship.
2. Product markets, by contrast, are where households buy finished goods and services.
3. Buying productive resources points to the factor market.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit I "Meaning and Types of Markets", p.2_
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