Microfinance
August 16, 2020Uncertainty Bearing Theory of Profit
August 23, 2020
This presentation covers the following concepts:
- Marginal Productivity Theory of Distribution
- Definition
- Assumptions of the Theory: Perfect competition in both product and factor markets, Operation of the law of diminishing returns, Homogeneity and divisibility of the factor, Operation of the law of substitution, Profit maximization, Full employment of factors & Exhaustion of the total product
- Some key concepts: MPP, VMP & MRP
- Explanation of the Theory with the help of graph & schedule
- Criticisms of the Theory: Market imperfection, Full employment, Inhuman theory, Difficulties of factor substitution & Emphasis on the demand side only
