Respuesta :
The price of land labor capital and entrepreneurship in a factor market determines supply and demand.
What is the relationship between supply and demand?
A basic tenet of economics is that when there is more supply than demand for an item or service, prices decline. Prices typically increase when demand outpaces supply. When demand is constant, there is an inverse relationship between supply and prices of products and services.
Rent is paid for the services given by land or other immovable assets, salaries are paid for the services of labor, interest is paid for the services of capital, and profit is for the component of payment to entrepreneurship.
The difference between the number of products and services that individuals can purchase and the quantity of those that they desire to purchase The law of supply and demand states that prices can be raised if less of a commodity is produced than the market will bear.
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