According to marginal productivity theory, the price of a factor is determined by?

Selling price
Cost
Marginal productivity
Cost pricing

The correct answer is C. Marginal productivity.

Marginal productivity is the additional output produced by adding one more unit of input. In the context of factor pricing, marginal productivity theory states that the price of a factor of production is determined by its marginal productivity. This means that the more productive a factor is, the higher its price will be.

Selling price is the price at which a good or service is sold. Cost is the amount of money that is spent to produce a good or service. Cost pricing is a method of pricing goods or services that sets the price equal to the cost of production plus a profit margin.

While selling price, cost, and cost pricing can all affect the price of a factor of production, they are not the primary determinants of price according to marginal productivity theory.

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