According to the product exhaustion theorem, when all the factors of production are paid the value of what they produce, then at the long-run equilibrium of a perfectly competitive economy, the sum of their shares of the value of the socially produced pie must equal
A) 100
B) 1/3
C) 1

Question

Quizplus · Accepted Answer

At the long-run equilibrium of a perfectly competitive economy, the sum of the shares of the factors of production (land, labor, capital, and entrepreneurship) must equal the total value of the goods and services produced. Therefore, their sum must be equal to 1 (100%).

According to the Product Exhaustion Theorem, When All the Factors