Different types of goods and services are produced in an economy. The production of goods and services are possible because of the factors of production. Traditionally, four types of factors of production are used in the production process i. e. Land, labor, capital, and entrepreneurship. These factors of production incur certain costs and these costs are the prices of the factors. Rent is paid for the land, the wage for labor, interest for capital and profit for entrepreneurship. Different types of economic theories have been developed for the determination of the price of each factor of production. These theories are called theories of factor pricing.