According to the marginal productivity theory of income distribution, in a competitive economy each factor of production is paid its equilibrium value of the marginal product.False

Question

Quizplus · Accepted Answer

According to the marginal productivity theory of income distribution, each factor of production is paid its marginal product. However, in a perfectly competitive market, each factor of production may not necessarily receive its equilibrium value due to market imperfections such as market power and information asymmetries.

According to the Marginal Productivity Theory of Income Distribution, in a Competitive