Somtochukwu

The mechanism for the determination of factor prices does not differ fundamentally from the prices of commodities.

Factor Prices are determined in the market under the forces if demand and supply. But, the difference lies in the determinant of the demand and supply of productive resources.

Historically, factors have been classified by Economists onto four(4) groups which are;

• Land
• Labour
• Capital and
• Entrepreneurship

The prices of the factors are called;

• Rent for Land
• Wages for Labour
• Interest for Capital
• Profit for Entrepreneurship

Each of these factors are determined by different theories.

Let us connect on social media forever;

• 
• 
• 
• 
• 
• 
•