Reply To: MRP trend over time for a producer good


The MRP depends on both the demand for the output (which determines the output’s price) and the physical productivity of the capital good. While the latter might decline over time without maintenance and repair (which is omitted from the example for simplicity), it might also increase with more productive complementary factors of production, such as a more skilled worker (which is also omitted for simplicity). Demand for the output might be expected to rise with a successful business and even more so in an economy with price inflation like ours.

As you suggest, rising MRP is a not a necessary feature of all production, but merely one logical possibility.