Euler’s theorem (欧拉定理)

Euler’s theorem (欧拉定理 ōu lā dìnglǐ) states that if a production function involves constant returns to scale and every input factor is paid the value of its marginal product, the total product will be disposed of without any surplus or deficit. It can be used to prove that economic profit must be zero.

  • 欧拉 (ōu lā) is the transliteration of the name Euler.

Also see: economic profit.

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