What Is Marginal Resource Cost?
Quick Answer
Harper College's economics department defines marginal resource cost as the added cost created in manufacturing a product by employing an additional resource unit. Generally, the added resource unit is another worker.
Continue ReadingFull Answer
The Oswego State University of New York further defines the marginal resource cost by linking it to the marginal revenue product, which is the additional revenue obtained by adding an additional resource. Companies use the marginal revenue product and the marginal resource cost to determine if new workers should be hired. If the additional revenue is higher than the cost, then the additional resource unit is considered profitable. To improve profits from a product, a resource unit may be removed if the marginal resource cost is higher than the marginal revenue product for that unit.
Learn more about Financial CalculationsRelated Questions
-
Q:
What Are Some Real-Life Examples of Diminishing Marginal Utility?
A: A common real-life example of diminishing marginal utility is the all-you-can-eat-buffet, according to Investopedia. As a person begins to fill up on food,... Full Answer >Filed Under: -
Q:
What Is Profit Maximization?
A: In economics, profit maximization refers to the process by which a business assesses the price and output of goods in order to ensure the greatest profit. ... Full Answer >Filed Under: -
Q:
What Is a Marginal Revenue Function?
A: The marginal revenue function in economics refers to the increase in revenue resulting from the sale of one additional unit of output. Marginal revenue is ... Full Answer >Filed Under: -
Q:
What Is the SWOT Analysis of Meezan Bank?
A: The SWOT analysis of Meezan Bank is a crucial resource for the company’s management, executives, shareholders and anyone looking to gain a better understan... Full Answer >Filed Under:
You May Also Like
-
Q:
What Is a Moneygram Exchange Rate Calculator?
-
Q:
What Is the Average Interest Rate on an Auto Loan From Bank of America?
-
Q:
How Much Do Americans Spend on Fast Food Each Year?
-
Q:
What Is the Trade Life Cycle?
-
Q:
How Do You Calculate Inventory Turnover?
-
Q:
How Do You Calculate the Cost of a Car Loan?
