What Is Marginal Revenue Product (MRP)? Marginal revenue product (MRP), also known as the marginal value product, is the marginal revenue created due to an addition of one unit of resource. The marginal revenue product is calculated by multiplying the marginal physical product (MPP) of the resource by the marginal revenue (MR) generated. The MRP
What Does Marginal Social Cost Mean? Marginal social cost (MSC) is the total cost society pays for the production of another unit or for taking further action in the economy. The total cost of the production of an additional unit of something is not merely the direct cost undertaken by the producer but also includes
What Is a Marginal Tax Rate? The marginal tax rate is the tax rate you pay on an additional dollar of income. In the United States, the federal marginal tax rate for individuals increases as income rises. This means that your marginal tax rate will likely be lower than your tax bracket. This method of
What Is Marginal Utility? Marginal utility is the added satisfaction that a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item consumers are willing to purchase. Positive marginal utility occurs when the consumption of an additional
What Is Marginal VaR? Marginal VaR refers to the additional amount of risk that a new investment position adds to a firm or portfolio. Marginal VaR allows risk managers to study the effects of adding or subtracting positions from an investment portfolio. Since value at risk (VaR) is affected by the correlation of investment positions
What Is a Margin Call? A margin call occurs when the percentage of an investor’s equity in a margin account falls below the broker’s required amount. An investor’s margin account contains securities bought with a combination of the investor’s own money and money borrowed from the investor’s broker. A margin call refers specifically to a broker’s
What Is Margin Creep? Margin creep has multiple meanings in finance. In both of the cases, margin creep refers to a slow reduction over time of a company’s overall profit margin. A product’s margin is the difference between the cost of the good or service and the retail price. The greater the difference between the cost of
What Is Margin of Safety? Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. In other words, when the market price of a security is significantly below your estimation of its intrinsic value, the difference is the margin of safety. Because
What Is Marital Property? Marital property is a U.S. state-level legal term that refers to property acquired during the course of a marriage. Property that an individual owns before a marriage is considered separate property, as are inheritances or third-party gifts given to an individual during a marriage. Marriage partners may choose to exclude certain
What Is a Marital Trust? A marital trust is a fiduciary relationship between a trustor and trustee for the benefit of a surviving spouse and the married couple’s heirs. Also called an “A” trust, a marital trust goes into effect when the first spouse dies. Assets are moved into the trust upon death and the
