Capital owners are compensated according to the value of the marginal product of that capital.

Question

Quizplus · Accepted Answer

In economics, the theory of marginal productivity states that the compensation of capital owners is determined by the value of the additional output produced by the last unit of capital employed, known as the marginal product of capital. This principle suggests that the income or rent earned by capital is tied to its productive contribution to the production process.

Capital Owners Are Compensated According to the Value of the Marginal