Factor prices: entrepreneurs are willing to pay for land, labor, and capital if profit is expected by the employment of the factor. Thus the most any entrepreneur is willing to pay for it is the anticipated discounted marginal revenue product. #econinonetweet (details below)
"Anticipated": the entrepreneur must make a forward-looking guess about the profitability of the production process.
"Discounted": the payment to the factor owner is made in advance of any revenues from selling output. The time difference means that the capitalist-entrepreneur is making an intertemporal exchange and so the present costs are discounted for time preference/interest.
"Marginal": the entrepreneur considers discrete units of factors of production and their individual impact on...
"Revenue": the proceeds from selling the resulting output of the production process by using the combined factors. #econinonethread
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