In this chapter, we have studied markets for factors, goods that firms use as inputs into production. These markets are in many ways like the other markets we’ve looked at in this book, markets in which demand and supply interact to determine an equilibrium quantity and price. What’s a bit unique is that the demand for factors is a derived demand; the demand for them depends on the demand for the outputs that firms make with the factors. The story behind factor supply can be a bit different, too, with labor supply arising from people’s decisions about labor-leisure tradeoffs and the supply of unimproved land being fixed. We sometimes also have special names for factor prices—wages for labor, rent for land. But in the end, the basic mechanics of factor markets are nearly the same as those for other markets, and so the lessons we’ve learned from them serve us well in understanding factor prices and quantities.