The modern competitive market is diverse and contains both institutionalized factors and factors whose action does not fit into the schemes and descriptions of its functioning. First of all, it should be noted that markets of factors of production are those elements of economic activity in which the main objects of operations are capital, intellectual potential, knowledge, land and minerals, entrepreneurial art - in a word, a very wide range of substances that directly or indirectly affect on economic activity. A special role is played by product sales markets , where primary products, such as labor, capital and land, act as these products. Factor markets have a number of characteristic properties that significantly distinguish them from other types of markets. First of all, it is necessary to realize that the production factors themselves , which are directly or indirectly used in the production sphere, are classified into two conditional categories:
- material factors, which should include land and capital;
- intangible, or social factors, the basis of which are human labor (with all the components of this complex structure) and entrepreneurial art.
Competitive markets of factors of production in modern conditions contribute to the implementation of a number of functions, due to which both resource support of functioning entities and non-material are provided. Among other things, the markets of factors of production contribute to solving the problems of efficient distribution and use of the wealth of the natural environment, provide rational logistics of economic relations, and contribute to the formation of an adequate market environment.
As a rule, factor markets are characterized by the presence of a sufficiently large number of participants who cannot directly influence the price of factors of production on the market. In particular, if any company decides to purchase for its needs a certain part of the total market volume of building materials, then in this case, the decision of the company to acquire will not have any effect on the cost of these materials. Accordingly, and vice versa, if any manufacturer of building materials that controls only a small part of the market starts selling a new batch of its products, then it will not significantly affect the average market price.
To understand why these markets have such a feature, an analysis of competitive conditions, that is, supply and demand for a specific factor of production present on the market, should be carried out. Then it is necessary to add these indicators and carry out the same operation with respect to the offer on the market. As a result of this analysis, a snapshot of the supply and demand curves is obtained, which quite transparently characterizes the situation at the moment.
The curves of supply and demand graphs that characterize the state of the market factors may differ significantly from the same, but characterizing the consumer market. The reason for this phenomenon is that the demand for factors, in contrast to the demand for consumer goods, always acts as a derivative of the total volume of production of a company participating in the market for factors and its costs for the factors used.
But there may be a situation in which these indicators will look similar. But this does not mean that the factor market will acquire the properties of the consumer market. The reason for this may be a change in the general situation on the macroblood, which affects this local market, or if it is itself a part (branch) of a larger market structure.