Which set of institutions guarantees that input owners receive their VMP?
A)perfect competition
B)cooperative ownership
C)voluntary not- for- profit agencies
D)the U.N. Charter

Question

Quizplus · Accepted Answer

Perfect competition is the only option that operates based on the principle of VMP (value of marginal product) where input owners receive the value of their contribution to the production process. In a perfectly competitive market, there are many buyers and sellers, and the price of goods is determined by the forces of supply and demand. Each input owner is paid their VMP, which is the additional revenue generated from the last unit of input used. This ensures that input owners are compensated fairly for their contributions to the production process.

Which Set of Institutions Guarantees That Input Owners Receive Their