Demand in Factor Markets Differs from Demand in Product Markets

question 238

Multiple Choice

Demand in factor markets differs from demand in product markets in that

• A) the demand for a factor of production is difficult to determine.
• B) the demand for a factor of production is influenced by workers' productivity and by the producers' expected sales revenues, not by tastes and preferences of consumers.
• C) demand for a factor of production is based on the tastes and preferences of firms.
• D) demand for a factor of production is based on the tastes and preferences of resource owners.

---

Definitions:

Break-Even

The point where overall expenses match overall income, leading to neither a profit nor a loss.

Variable Costs

Expenditures that adjust according to the quantity of goods or services produced by an enterprise.

Fixed Costs

Regular outgoings that stay the same whether production or sales rates increase or decrease, for instance, rental costs or salary payments.

Net Income

This refers to the total profit of a company after all expenses and taxes have been deducted from total revenue.