Marginal Revenue Product (MRP) Calculator




 

Marginal Revenue Product (MRP) Calculator (Formula)

The marginal revenue product (MRP) is a measure of the additional revenue generated by hiring one more unit of a resource, such as labor. The MRP formula is as follows:

MRP = MPP * MR

Where:

  • MPP (Marginal Physical Product) is the additional output produced by hiring one more unit of the resource
  • MR (Marginal Revenue) is the additional revenue generated by selling the additional output produced by the additional unit of the resource.

To use this formula to calculate the MRP, you need to know the MPP and the MR. Once you have these values, you can plug them into the formula and calculate the MRP.

For example, if the MPP is 10 units of output and the MR is $5 per unit of output, the MRP would be:

MRP = 20 * $12 = $240

This means that hiring one more unit of the resource would generate an additional $50 in revenue.

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