Todd Cox
04/28/2024 · Senior High School
The factors of production are sold to producers by individuals/households. This transaction is represented to us in the circular flow model. What market does this transaction toke place in? The product market, where households purchase goods and services The resource market, where firms get the things they need to create goods and services
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The transaction where factors of production are sold to producers by individuals or households takes place in the **resource market**. In this market, households provide factors of production (such as labor, land, and capital) to firms, which use these resources to create goods and services. The product market, on the other hand, is where households purchase finished goods and services from firms.
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This transaction occurs in the **resource market**.
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