The demand for resources in the factor market represents how much of a resource businesses are willing and able to purchase at various prices. It is determined by factors such as productivity, cost of alternative resources, and demand for final goods.
Related terms
Marginal Revenue Product (MRP): The additional revenue generated from employing one more unit of a specific resource.
Substitute Resources: Alternative resources that can be used in place of each other to produce a similar output.
Complementary Resources: Resources that are used together in the production process and have a joint demand.