In which market would a producer buy the equipment and technology needed to manufacture bicycles?

• A. Labor market
• B. Factor market
• C. Product market
• D. Consumer market

Answer: (B)

Verified step by step guidance

1. Understand the distinction between different types of markets: the labor market involves buying and selling labor services, the product market involves buying and selling finished goods and services, and the consumer market is where consumers purchase goods for personal use.
2. Recognize that producers need inputs or resources such as equipment, technology, and raw materials to produce goods.
3. Identify that markets where producers buy inputs like equipment and technology are called factor markets, also known as input markets or resource markets.
4. Recall that factor markets include the buying and selling of factors of production such as labor, capital (equipment and technology), land, and entrepreneurship.
5. Conclude that since equipment and technology are capital goods used in production, producers would buy them in the factor market.