Marginal revenue product for a perfectly competitive seller is equal to

Question

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Marginal revenue product (MRP) is the additional revenue generated from hiring one more unit of labor. For a perfectly competitive seller, the MRP is equal to the change in total revenue that results from hiring another worker. This is because in a perfectly competitive market, the seller is a price taker, so the output price is constant, and therefore, the product price multiplied by the total product of labor (A) is irrelevant. Additionally, the number of workers hired (B) is not directly related to the MRP. The marginal cost of production (D) is also not relevant to the calculation of MRP.

Marginal Revenue Product for a Perfectly Competitive Seller Is Equal