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Munich Personal RePEc ArchiveMarginal revenue product and salaries: Moneyball redux Rockerbie, Duane W University of Lethbridge1 March 2010Online at https://mpra.ub.unimuenchen.de/21410/ MPRA Paper No. 21410, posted 16 Mar 2010 01:22 UTCMarginal Revenue Product and Salaries: Moneyball ReduxDuane W. RockerbieaAbstractScully (1974) used a two equation regression model to estimate a baseball players salary to compare to the actual salary the player earned in order to determine if a player is...
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01
Identify the quantity of output produced by a specific level of input.
02
Determine the change in total revenue resulting from employing one additional unit of input.
03
Calculate the marginal product of the input by measuring the additional output produced when one more unit of input is added.
04
Divide the change in total revenue by the marginal product to find the marginal revenue product.

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Business owners seeking to optimize their production processes.
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Economists analyzing labor markets and productivity.
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Managers making decisions about hiring and resource allocation.
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Investors assessing the efficiency of firms in maximizing profit.
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Marginal revenue product (MRP) is the additional revenue generated from the use of one more unit of a resource, such as labor or capital, while keeping other inputs constant.
Businesses that are assessing the productivity and profitability of their resources, particularly in economics and accounting contexts, are required to analyze and file marginal revenue product.
To fill out the marginal revenue product, determine the additional output produced by the last unit of input, calculate the additional revenue generated from that output, and then document these figures in a structured format.
The purpose of marginal revenue product is to help businesses evaluate the value of additional units of input, guide hiring and investment decisions, and optimize resource allocation for maximum profitability.
The information that must be reported includes the amount of additional input used, the additional output produced, the price at which the output is sold, and the resulting marginal revenue generated.
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