Answer:
A market economy has three components: the factor market at one end, the consumers market at the other end, and, in between, the producers—the companies that create the products we use.
Step-by-step explanation:
A producer is someone who creates and supplies goods or services. Producers combine labor and capital—called factor inputs—to create—that is, to output—something else. Business firms are the main examples of producers and are usually what economists have in mind when talking about producers.The product market is where goods and services are sold and bought, while the factor market is where different factors of production like land, capital, labor are bought and sold.
What role do factor and product markets play in the economy? Factor markets help the economy grow by providing entrepreneurs with the equipment they need to make their ideas a reality. Product markets offer consumers goods and services, and producers make money in return.
Factor market is the market for services needed to complete the production process. Some examples are inputs like capital, labor, raw material, entrepreneurship, and land. The factors can be purchased and sold, and they're needed in order for the goods and services market to complete a finished product.
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