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, the payment for each unit of a resource is equal to its marginal revenue product. This means that the amount a unit of a resource is paid is equal to the additional revenue generated from using one more unit of that resource. This is because in a perfectly competitive market, the price of a resource is determined by its marginal revenue product. Therefore, choice (C) is the correct answer.

In the Marginal Productivity Theory of Income Distribution, When All