Which of the following is NOT the assumption of the Marginal Productivity Theory of Distribution ........

Economics- Phase (I & II) Demand and Supply , Market Structures

Download Solution PDF

Which of the following is NOT the assumption of the Marginal Productivity Theory of Distribution?

Homogenity of a factor

Perfect competition in the factor market

All factors, except one, are variable

Given stock of each factor and full employment

छोटे Courses बड़े Results

Master Demand and Supply , Market Structures

Prepare through Micro-courses

Try Now

Explanation:

All factors, except one, are variable is NOT the assumption of the Marginal Productivity Theory of Distribution. MP theory of distribution states that price of any input is determined according to the marginal product of that input. Thus, the price of labour—the wage rate—is determined by the volume of marginal product, or to be more specific, the value of marginal physical product