Question

Explain how firms and individuals participate and interact in the product market and factor market

Answer 1

In the product market, households buygoods and services from businessesin exchange for money. In the factor market, the businesses buy labor from households in exchange for money. ... Households interact with businessesin the factor market every time a person does paid work for a company

Answer 2

Market

• Market is a place where buyers and sellers interact to decide price, quality etc.

• Factor market is a markets in which productive resources are bought or sold. Product market is the type of market in which goods and services are bought or sold.

• Individual earns money (income) from factor market by doing labor . Hiring of workers, borrowing money, acquiring lands comes under factor market. Selling of goods and services comes under product market and individuals spend their money in product marks on buying goods.