We have studied above the general them y of incollie distribution. Two questions arise: (oj Is the distribution equitable, fair and just’! (II) Why is there inequality of incomes? The first question is ethical and involves value judgment and docs not admit of any objective measurement. Also, no two opinions agree the other hand. at OW” price. the demand “WL” is greater than the supply “W M”; hence price will tend to go up to OW at which the demand and supply will be equal. This is how price of a factor of production in the factor market is determined by the interaction of the forces of demand and supply relating to that factor of production. The modern economists consider this theory as a satisfactory theory of distribution.