The distribution of national income -The distribution of the total income is determined by factor prices,the prices per unit that firms pay for the factors of production. -The wage is the price of L,the rental rate is the price of K. CHAPTER 3 National Income slide 7CHAPTER 3 National Income slide 7 The distribution of national income ▪ The distribution of the total income is determined by factor prices, the prices per unit that firms pay for the factors of production. ▪ The wage is the price of L, the rental rate is the price of K. 2