What Determines Pay?
Readers Question: What factors determine what someone deserves for pay? Basic economic theory suggests that wages depend on a workers marginal revenue Product MRP. (this is basically the value that they add to the firm who employs them MRP is determined by two factors MPP – Marginal phyiscal product – the productivity of a worker MR – Marginal Revenue of last good sold – Effectively the price and demand for the good that the worker produces. More on Marginal Revenue Product and det