Marginal Resource Cost (MRC)

Definition

Marginal Resource Cost refers to the additional cost a firm incurs when it hires one more unit of a specific resource, such as labor or capital.

Related terms

Marginal Productivity: This term refers to the change in output that results from hiring one more unit of a specific resource.

Marginal Revenue Product (MRP): MRP is the additional revenue generated by employing one more unit of a specific resource.

Diminishing Marginal Returns: This concept states that as more units of a variable input are added, while other inputs remain constant, the marginal product will eventually decrease.