According to the _____,in a perfectly competitive economy each factor of production is paid its equilibrium value of the marginal product.
A)theory of labor supply
B)efficiency-wage model
C)theory of compensating differentials
D)marginal productivity theory of income distribution

Question

Quizplus · Accepted Answer

The marginal productivity theory of income distribution states that in a perfectly competitive economy, each factor of production is paid its equilibrium value of the marginal product. This means that the income earned by each factor of production (e.g. labor, capital) is equal to the additional output it contributes to production in that particular market.

According to the _____,In a Perfectly Competitive Economy Each Factor