What is the full form of MRP?
The full form of MRP is Maximum Retail Price. This is the highest price of the product which is fixed by the manufacturer of the product. This price is fixed keeping all taxes in view.
Only the manufacturer of the product has the right to decide the MRP of the product. Every product that is retailed in India must have an MRP and no retailer can sell any product at a price higher than its MRP. But if he wants, he can sell the product at a lower price by giving some discount.
If a retailer sells any product at a price higher than its MRP, then it is a legal offense under the Consumer Goods Act 2006.
Who decides the MRP of the Products?
Only and only the Government of India has the right to decide the MRP of medicines sold in medical.
And other than medicines, any product that is retail, its MRP is decided by the manufacturer of that product according to its cost and profit expectation.
How is MRP determined?
Let see with an example:- Suppose a product whose MRP is printed ₹100 by the manufacturer.
The manufacturer spent 30₹ to make that product and added his profit of 20₹ to it and sold it to the wholesaler for 50₹. Now wholesaler brought that product to his warehouse, which cost 15₹, and his profit of 10₹ added to the product price and sold to the shopkeeper for 75₹. Now shopkeeper brought that product to his shop, which cost 10₹ and his profit of 5₹ added to the product price. After all this, the price of the product became 90₹, now the shopkeeper can sell it on MRP or sell it for 90₹.
Advantages & Disadvantages of MRP
The biggest advantage of MRP is that no shopkeeper can cheat his customers. MRP is a way to help the customers. But there is a loss of MRP to the shopkeepers, some goods come from far away and it costs more than the MRP, and in this case, the shopkeeper suffers.
Other full forms of MRP
- MRP – Material Requirement Planning
- MRP – Machine Readable Passport
Also check out the below acronym:-