According to Euler's Theorem, If Competitive Firms Pay Each Factor

question 63

Multiple Choice

According to Euler's theorem, if competitive firms pay each factor its marginal product and the production function has constant returns to scale, the sum of all factor payments will equal:

• A) total investment.
• B) total saving.
• C) total profits.
• D) total output.

---

Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a certain period of time, indicating the efficiency of inventory management.

Cost Of Goods Sold

The immediate expenses related to manufacturing products sold by a business, which encompass both materials and labor.

Merchandise Inventory

The total value of a company's products that are physically held in stock, awaiting sale to customers.

Accounts Receivable Turnover

A financial ratio that measures how many times a company collects its average accounts receivable within a given period.