Marginal Productivity Theory of Resource Demand

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Resource Demand as Derived Demand

Derived Demand - demand derived from the products that the resources help produces
Ex: the demand for airplane generates a demand for assemblers

Marginal Revenue Product

MRP = Δ TR / Δ resource quantity

Rule for Employing Resources: MRP = MRC

MRP as Resource Demand Schedule

Resource Demand under Imperfect Product Market Competition

Market Demand for a Resource

Horizontal sum of individual firms' MRP (demand) curves

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