An employer hiring in a competitive labor market should hire additional labor as long as the marginal revenue product (MRP) exceeds the wage rate.
Marginal revenue product (MRP), also called the marginal fee product, is the marginal sales created due to an addition of 1 unit of resource. The marginal sales product is calculated via multiplying the marginal physical product (MPP) of the useful resource through the marginal sales (MR) generated.
How do you calculate marginal revenue product made from labor?
The marginal revenue product fabricated from a worker is equal to the fabricated from the marginal fabricated from exertions (MPL) and the marginal revenue (MR) of output, given with the aid of MR×MPL = MRPL.
Why is marginal revenue product vital?
Marginal revenue product (MRP) explains the additional revenue generated by means of adding an additional unit of manufacturing resource. it's miles an important idea for determining the demand for inputs of production and analyzing the most advantageous amount of a useful resource.
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Deadweight loss is a type of economic inefficiency when a good or service is not at its economic equilibrium (where supply equals demand). This loss may be experienced because of a tax or subsidy, or because of market power, such as a monopoly. Economists refer to deadweight loss when they want to show the negative effects of certain policy decisions that are less than optimal.
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Answer:
Option c) the ability to sustain long term bottom line growth with stable supply base.
Bottom line or the triple bottom line includes three-dimensions people, profit and planet. TBL focuses on such sustainability by understanding the impact of organization's activities on profitability, society and the environment altogether.
