In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its
A)total product.
B)marginal product.
C)marginal revenue product.
D)total revenue product.

Question

Quizplus · Accepted Answer

In the marginal productivity theory of income distribution, when all markets are purely competitive, the payment for each unit of a resource is equal to its marginal revenue product. This is because the marginal revenue product reflects the additional revenue generated by employing one more unit of the resource, which is what the competitive market will pay for.

In the Marginal Productivity Theory of Income Distribution, When All