Euler's theorem
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Euler's theorem is the mathematical result economists use to show that economic profit must be zero if the production function has constant r eturns to scale and if factors are paid their marginal products.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Euler's theorem. The mathematical result economists use to show that economic profit must be zero if the production function has constant r eturns to scale and if factors are paid their marginal products.
