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Shraddha Mishra

· started a discussion

· 1 Months ago

please explain (Question: 188231.0 )

kindly explain this

Question:
Marginal productivity theory of distribution states that the price of a factor of production depends upon its-
Options:
A) Average productivity
B) Total productivity
C) Marginal productivity
D) Negative productivity
Solution:
Ans: (c)

Knowledge Expert

· commented

· 1 Months ago

Dear Student,
Please refer the below statement,
“The marginal productivity theory of income distribution states that in the long run under perfect competition,
factors of production would tend to receive a real rate of return which was exactly equal to their marginal
productivity.”

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