The price of any factor of production in a competitive market depends on the value of the final product it is used to produce.

Question

Quizplus · Accepted Answer

In a competitive market, the price of a factor of production (such as labor, land, or capital) is determined by the marginal productivity of that factor, which is directly related to the value of the final product it helps to produce. If the factor contributes significantly to the production of a valuable product, its price tends to be higher.

The Price of Any Factor of Production in a Competitive