Asked by Shreyans Nanavati on May 30, 2024
Verified
The fact that monopoly and monopsony exist in resource markets means that:
A) the marginal productivity theory of income distribution is valid.
B) resource prices do not always measure contributions to output.
C) the resulting income distribution is ethically correct.
D) income shares do not exhaust the total output.
Monopoly and Monopsony
A market structure where a single company dominates the supply side as a monopoly, or the buying side as a monopsony, of a market.
Resource Markets
Markets where productive inputs like labor, raw material, and capital are bought and sold.
Marginal Productivity Theory
A principle stating that the wage paid to a factor of production, such as labor, will equal the additional output or marginal product that the factor produces.
- Comprehend the essentials of marginal productivity theory concerning the allocation of income and recognize its disapprovals.
Verified Answer
Learning Objectives
- Comprehend the essentials of marginal productivity theory concerning the allocation of income and recognize its disapprovals.
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