Marginal Revenue Product (MRP) Calculator

Calculate Marginal Revenue Product (MRP)



Formula

The formula to calculate Marginal Revenue Product (MRP) is:

\[ MRP = MPP \times MR \]

Where:

What is Marginal Revenue Product (MRP)?

Marginal Revenue Product (MRP) is a measure of the additional revenue generated by hiring one more unit of labor. It helps businesses determine the value of increasing their workforce by quantifying the revenue contribution of an additional worker. In simple terms, MRP is the extra revenue a company can expect to earn from the goods produced by one more employee.

Example Calculation

Let's consider an example:

Using the formula to calculate Marginal Revenue Product:

\[ MRP = 300 \times 5 = 1500 \, \text{dollars} \]

This means that hiring one additional worker would generate an additional $1,500 in revenue for the company.