Marginal productivity theory states how free-market economies determine the returns on the factors of production, whereby each factor is paid its marginal
A) revenue product
B) revenue
C) physical product

Question

Quizplus · Accepted Answer

Marginal productivity theory states that each factor of production is paid its marginal revenue product, which is the additional revenue that is generated when an additional unit of that factor is added to the production process. Therefore, the correct choice is A) revenue product.

Marginal Productivity Theory States How Free-Market Economies Determine the Returns