Overview
MRPL, or Marginal Revenue Product of Labor, is a key concept in labor economics that helps businesses understand the value of hiring additional workers. By calculating MRPL, companies can make informed decisions about how many employees to hire based on the additional revenue each worker can generat...
Key Terms
Example: If hiring one more worker increases output from 10 to 12 units, the marginal product is 2.
Example: A company earns $100,000 in revenue from selling its products.
Example: High demand for workers in a booming industry can lead to increased hiring.
Example: A worker earns $15 per hour for their job.
Example: When 100 workers are willing to work at $20 per hour, and employers want to hire 100 workers at that wage.
Example: A production function might show how many units of a product can be made with different amounts of labor and capital.