MPC Calculator

Calculate your marginal propensity to consume. Enter your change in monthly income and change in consumption to calculate your MPC.

MPC Formula

MPC stands for marginal propensity to consume. This is a term that refers to the increase in consumption, or spending, when an increase in income occurs. It is a simple ratio of change in consumption to change in income by the following formula:

MPC = Change in Consumption/Change in Income

How to calculate MPC

Let’s look at an example of how to calculate MPC. Lets assume you receive an increase of $2000.00 per month in income. A nice bump to be sure. Then because of this raise you decide you can start spending more, and end up consuming $1,100.00 extra per month.

Through the formula above, you would end up with a MPC of 1,100/2000= .55.

This is just above the recommended MPC of .50

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