Scribd
Upload
694 views10 pages

Marginal Productivity Theory of Distribution

The document outlines the Marginal Productivity Theory of Distribution. It lists 13 assumptions of the theory including perfect competition and the law of diminishing returns. It defines key concepts like MPP, VMP, and MRP. It then analyzes the theory from the point of view of an industry and a firm. Finally, it lists 7 criticisms of the theory such as its unrealistic assumptions and focus only on the demand side.

Uploaded by

sangeetagoele
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
694 views10 pages

Marginal Productivity Theory of Distribution

The document outlines the Marginal Productivity Theory of Distribution. It lists 13 assumptions of the theory including perfect competition and the law of diminishing returns. It defines key concepts like MPP, VMP, and MRP. It then analyzes the theory from the point of view of an industry and a firm. Finally, it lists 7 criticisms of the theory such as its unrealistic assumptions and focus only on the demand side.

Uploaded by

sangeetagoele
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Marginal Productivity Theory of

Distribution
Presented by:
Dr. Sangeeta
Assistant Professor (Management)
Maharaja Agrasen University
Baddi
Assumptions:
 1. Perfect Competition:
 2. Homogeneous Factors:
 3. Rational Behaviour:
 4. Perfect Substitutability:
 5. Perfect Mobility:
 6. Interchangeability:
 7. Perfect Adaptability:
 8. Knowledge about Marginal Productivity:
Assumptions:
 9. Full Employment:
 10. Law of Variable Proportions:
 11. The Amount of Factors of Production should
be Capable of being Varied:
 12. The Law of Diminishing Marginal Returns:
 13. Long-Run Analysis:
Some Key Concepts:

 MPP
 VMP
 MRP
Calculation of MPP, VMP and MRP of a Variable Factor (Labour)
Analysis of Marginal Productivity Theory

 from the Point of View of an Industry


 from the Point of View of an Firm
From the Point of View of an Industry:
From the Point of View of Firm:
Criticisms of the Theory:

 1. In determination of marginal product:


 2. Unrealistic:
 3. Market imperfection:
 4. Full employment:
 5. Difficulties of factor substitution:
 6. Emphasis on the demand side only:
 7. Inhuman theory:

You might also like