The Full form of MRP is Maximum Retail Price. MRP is a price that is calculated by the manufacturer of a product and is also the highest price that can be charged for a product sold in the country. MRP comprises of all the government taxes that are levied on that product and it is the highest possible price that can actually be charged from a customer for that product. However, retailers may sell the products to the customers for less than the MRP.
MRP differs from those using recommended retail price systems because in those systems the manufacturer calculated price is not enforceable by law and it is only a recommendation. All products sold through retail must be marked with MRP in India. It is mandated that shops cannot charge over the MRP from the customers. Some retailers/shops may charge slightly below MRP to draw more attention of customers to their stores. The scope for sellers to sell products with MRP on the packaging to customers at a higher price becomes negligible.
It restricts the sellers to fool the customers by charging anything extra above the MRP of the product. In India, there are instances that in tourist spots, in some remote areas, and in situations where a product is difficult to obtain, retailers often charge illegally over the MRP.