Factor prices are determined in the factor market under the forces of

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Quizplus · Accepted Answer

Factor prices, such as wages for labor or rents for land, are determined by the interaction of demand and supply in the factor market, similar to how prices are determined in goods markets. Demand for a factor is influenced by its marginal productivity, while supply may be influenced by factors such as the elasticity of supply, but the actual price is ultimately set through the equilibrium between demand and supply forces.

Factor Prices Are Determined in the Factor Market Under the Forces