Question

LONG ANSWER QUESTIONS LAQS
Q1. Explain critically the marginal productivity theory of distribution.
ductivity theory of distribution is the general theory of factor pri​

Answer 1

Answer:

The marginal productivity theory of distribution, as developed by J. B. ... According to this theory, the price (or the earnings) of a factor tends to equal the value of its marginal product. Thus, rent is equal to the value of the marginal product (VMP) of land; wages are equal to the VMP of labour and so on.