The below mentioned article provides an overview on Clark’s Production Exhaustion Theorem. Assumptions: Clark based his analysis on the following assumptions: 1. There is free competition in both the product markets and factor markets. 2. Prices and wages are not manipulated either by government action or collusive agreements. 3. The quantity of each factor is given. 4. There are no [...]
In this article we will discuss about Product Exhaustion Theorem. After reading this article you will learn about: 1. Meaning and Solution of Product Exhaustion 2. Importance of Product Exhaustion Theorem. Meaning and Solution of Product Exhaustion: The product exhaustion theorem states that since factors of production are rewarded equal to their marginal product, they will exhaust the total product. [...]
The below mentioned article provides a close view on the Euler’s Product Exhaustion Theorem. Euler’s theorem can be solved as under. Let С and L be the quantities of two factors of production, capital and labour respectively and P the total product of these factors. Then P = f(C, L). In other words, if P is a linear homogeneous function [...]