1. The document discusses the concept of marginal productivity theory which states that the change in total output from employing an additional unit of a factor of production can be measured by the marginal productivity of that factor.
2. It provides a formula to calculate the marginal productivity of a factor and explains how marginal productivity theory can be used to determine the allocation of factors among competing uses.
3. The key points of marginal productivity theory are that it helps measure changes in output from small changes in factors of production, determine the optimal allocation of factors among firms, and establish the price that maximizes output.
1. The document discusses the concept of marginal productivity theory which states that the change in total output from employing an additional unit of a factor of production can be measured by the marginal productivity of that factor.
2. It provides a formula to calculate the marginal productivity of a factor and explains how marginal productivity theory can be used to determine the allocation of factors among competing uses.
3. The key points of marginal productivity theory are that it helps measure changes in output from small changes in factors of production, determine the optimal allocation of factors among firms, and establish the price that maximizes output.
1. The document discusses the concept of marginal productivity theory which states that the change in total output from employing an additional unit of a factor of production can be measured by the marginal productivity of that factor.
2. It provides a formula to calculate the marginal productivity of a factor and explains how marginal productivity theory can be used to determine the allocation of factors among competing uses.
3. The key points of marginal productivity theory are that it helps measure changes in output from small changes in factors of production, determine the optimal allocation of factors among firms, and establish the price that maximizes output.