Marginalist School (economic term)

Marginalist School Classical economists theorized that prices are determined by the costs of production. Marginalist economists emphasized that prices also depend upon thelevel of demand, which in turn depends upon the amount of consumer satisfaction provided by individual goods and services. Marginalists provided modern macroeconomics with the basic analytic tools of demand and supply, consumer utility, and a mathematical framework for using those tools. Marginalists also showed thatin a free market economy, the factors of production -- land, labor, and capital -- receive returns equal to theircontributions to production. This principle was sometimes used to justify the existing distribution of income: that people earned exactly what they or their property contributed to production.