AnalystNotes.com
  
Home  |   Study Notes  |   Practice Exams  |   Forums  |   Order  |   Contact
Select Your CFA® Level:
Level 1 06.2014 >
Level 1 12.2014 >
Level 2 06.2014 >
Seeing is believing! Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation. Read more...

 

 

     This subject is for LOS 13.a.
     There are 2 basic questions for this subject. Take a quiz: practice basic questions

A market is any arrangement that enables buyers and sellers to get information and do business with each other. A competitive market is a market that has many buyers and many sellers so that no single buyer or seller can influence the price.

Broadly speaking there are two types of markets:

  • Goods markets are markets where final products from businesses or firms are exchanged. Households and firms are usually buyers, and firms are sellers.

  • Factor markets are markets for the factors of production. These factors include labor, capital, raw materials, and entrepreneurship, etc. For example, in labor markets, households are sellers and firms are buyers.
The demand for a factor exists because there is a demand for goods that the resource helps to produce. The demand for each factor is thus a derived demand; it is derived from the demand of consumers for products. For example, engineers are needed to design cars. A car manufacturers demand for engineers thus depends entirely upon the demand for cars. The demand for engineers is a derived demand.
practice basic questionsPrint this subject