Write short notes on Marginal productivity theory of Distribution.
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The marginal productivity theory states that under perfect competition, price of each factor of production will be equal to its marginal productivity. The price of the factor is determined by the industry. ... Thus, for industry, it is a theory of factor pricing while for a firm it is a factor demand theory.
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The marginal productivity theory states that under perfect competition, price of each factor of production will be equal to its marginal productivity. The price of the factor is determined by the industry. ... Thus, for industry, it is a theory of factor pricing while for a firm it is a factor demand theory.
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