Factor markets and income ditribution

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jenayuban

Carreiras Tecnologia

Productive resources or
Factors of production

 Land
 Labor
 Capital
 Entrepreneur

Circular Flow

labor

Households Firms
Households Households

Wage Profit

Goods & Services

 product price (Derived demand)

 factor productivity

 prices of other factors

A concept that describes
the amount of demand for
labor that an economy or firm
is willing to employ at a
given point in time.

 MRP > MRC = additional man hour

 MRC > MRP = reduces man hour

 MRP = MRC = maximize profits

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