Factor-Price Equalization Theorem: It isone of the sub-theorems of the Heckscher-Ohlin Theory. Given a number of assumptions of the Heckscher-Ohlin Theory, namely perfect competition in both the commodity and factor market, no transportation costs between the trading countries, identical demand preferences of the trading countries and constant returns to scale in production in both of the trading countries, the FactorPrice Equalization Theorem postulates that international trade equalizes the factor prices along with the commodity prices. In other words, international trade provides one-toone correspondence between commodity prices and factor prices.