According to the marginal productivity theory of income distribution,every factor of production is paid a wage equal to the equilibrium value of its marginal product.

Question

Quizplus · Accepted Answer

According to the marginal productivity theory of income distribution, every factor of production is paid a wage equal to the equilibrium value of its marginal product. This means that each factor of production, such as labor or capital, is paid according to the additional output or revenue that it contributes to the production process. Therefore, the wages or payments to each factor of production are determined by their respective marginal products.

According to the Marginal Productivity Theory of Income Distribution,every Factor