Significance of Resource Pricing

• Money-income determination

• Cost-minimization

• Resource allocation

• Policy issues

Marginal Productivity Theory of Resource Demand

• Resource Demand as Derived Demand

• Marginal Revenue Product

• Rule for Employing Resources: MRP = MRC

• MRP as Resource Demand Schedule

• Resource Demand under Imperfect Product Market Competition

• Market Demand for a Resource

Determinants of Resource Demand

• Changes in product price

• Changes in productivity

• Changes in the prices of other resources

Elasticity of Resource Demand

Optimal Combination of Resources

• The least-cost rule

• The profit-maximizing rule

Marginal Productivity Theory of Income Distribution