Principles of Microeconomics / Unit 13 MIC 1204 short lesson, about 20 seconds
Marginal Revenue Product
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The idea
The general rule is marginal revenue product: marginal product times marginal revenue. Under competition marginal revenue equals price, so the value of the marginal product is the competitive case; the exam's term is marginal revenue product.
In practice
One formula covers both; only marginal revenue changes.
Where people slip
With market power marginal revenue is below price, so marginal revenue product is below the competitive value.
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