explain the marginal productivity theory of distribution?
Answers
Answer:
answer
Explanation:
you can ask the question to the Google assistant for that purpose you should tap or hold the home button Google Assistant will appear you should ask your question arey you the answer.
hope it is useful to you please give me a thanks for it please give me thanks.
Answer:
The oldest and most significant theory of factor pricing is the marginal productivity theory. It is also known as Micro Theory of Factor Pricing.
It was propounded by the German economist T.H. Von Thunen. But later on many economists like Karl Mcnger, Walras, Wickstcad, Edgeworth and Clark etc. contributed for the development of this theory.
According to this theory, remuneration of cache factor of production tends to be equal to its marginal productivity.
Marginal productivity is the addition that the use of one extra unit of the factor makes to the total production. So long as the marginal cost of a factor is less than the marginal productivity, the entrepreneur will go on employing more and more units of the factors. He will stop giving further employment as soon as the marginal productivity of the factor is equal to the marginal cost of the factors.