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ii. Perfect competition in factor market:

Implies that organizations are required to purchase the factor of production at the prevailing market price only. In case of perfect competition, all the factors of production are perfectly mobile. In addition, the supply of factors of production is perfectly elastic.

iii. Homogeneity of factors:

Assumes that all the units of a factor of production are homogeneous in nature. Therefore, the units are perfect substitutes of each other.

iv. Substitutability of factors:
Assumes that various factors of production act as substitutes of each other. For example, capital act as the substitute of labor.

v. Divisible factors:

Assumes that various factors of production can be divided in small parts.

vi. Maximum profit:

Assumes that the main aim of every organization is to maximize their profit.

vii. Full employment:

Refers to one of the assumptions of marginal productivity theory. Under full employment condition, the supply of a factor of production is fixed in quantity.