Marginal Revenue Product MRP

The derived nature of resource demand means that the strength of the demand for any resource will depend on

• the productivity of the resource in helping to create a good

• the market value or price of the good it helps to produce

A resource that is highly productive in turning out a highly valued commodity will be in great demand, while a relatively unproductive resource that is capable of producing only a slightly valued commodity will be in little demand. There will be no demand at all for a resource that is phenomenally efficient in producing something that no one wants to buy.

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