A major criticism of the marginal productivity theory of income distribution is that
A) the demand for labor resources is price inelastic.
B) achieving equality in incomes will take time.
C) imperfectly competitive firms are only interested in profit maximization.
D) property resources like land are unevenly distributed, which leads to income inequality.

Question

Quizplus · Accepted Answer

The marginal productivity theory assumes that factors of production are paid according to their marginal contributions to output. However, it does not account for the uneven distribution of property resources like land, which can lead to significant income inequality.

A Major Criticism of the Marginal Productivity Theory of Income