Remember that for a perfectly competitive firm Price is Marginal Revenue. Therefore, if a firm is perfectly competitive in its output market, the MRP for any input it hires is just Marginal Product times the Price at which the firm's product is sold.
The MRP curve gives the added revenue for an added unit of a factor. As such it turns out to be the factor demand curve.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved