<h2>Marginal Revenue Product (MRP)</h2>
<p>The <strong>Marginal Revenue Product (MRP)</strong> is a key concept in economics that represents the additional revenue a business generates from selling one more unit of a good or service. It's the change in total revenue (ΔTR) divided by the change in output (ΔQ).</p>

<h2>How It Works</h2>
<p>Mathematically, MRP is calculated as:</p>
<table>
<tbody>
<tr>
<td><strong>MRP</strong></td>
<td>=</td>
<td><strong>ΔTR</strong></td>
<td>/</td>
<td><strong>ΔQ</strong></td>
</tr>
</tbody>
</table>
<p>Where:</p>
<ul>
<li><strong>ΔTR</strong> is the change in total revenue</li>
<li><strong>ΔQ</strong> is the change in output (number of units produced and sold)</li>
</ul>

<h2>Why It Matters for Traders</h2>
<p>Understanding MRP is crucial for traders as it helps determine the optimal level of production and the price elasticity of demand. Here's why it matters:</p>
<ul>
<li><strong>Profit Maximization:</strong> MRP helps businesses (and traders) decide the optimal output level to maximize profits. Profit is maximized where MRP equals marginal cost (MC).</li>
<li><strong>Price Elasticity of Demand:</strong> MRP also helps measure the price elasticity of demand. If MRP is positive, demand is inelastic; if MRP is negative, demand is elastic.</li>
</ul>

<h2>Example</h2>
<p>Let's say a trader sells a product for $100 per unit and produces 100 units, generating $10,000 in total revenue. If the trader increases production to 110 units, total revenue increases to $11,000. The MRP is:</p>
<table>
<tbody>
<tr>
<td><strong>MRP</strong></td>
<td>=</td>
<td>($11,000 - $10,000)</td>
<td>/</td>
<td>(110 - 100)</td>
<td>=</td>
<td>$100</td>
</tr>
</tbody>
</table>
<p>This means that each additional unit sold generates an additional $100 in revenue.</p>

<h2>Key Takeaways</h2>
<ul>
<li>The Marginal Revenue Product (MRP) is the additional revenue generated from selling one more unit of a good or service.</li>
<li>MRP is calculated as the change in total revenue (ΔTR) divided by the change in output (ΔQ).</li>
<li>Understanding MRP helps traders maximize profits and understand the price elasticity of demand.</li>
</ul>