The rate of exploitation can be easily derived in the context of a simple model. Let $w$ be the wage rate that the firm must pay to attract/retain $L$ workers.

$$w = g(L)$$ (1)

Firm's try to maximize profits (setting price equal to 1), given their labor costs ($wL$) and their revenue ($F(L)$) where $F(L)$ is the production function.

$$\pi = F(L) - wL = F(L) - g(L)L$$ (2)

Taking the derivative with respect to $L$ and setting equal to zero:

$$MRP(L) = g(L) + g_L L$$ (3)

$$= w (1 + g_L \frac{L}{w})$$ (4)

$$= w (1 + \frac{1}{s})$$ (5)

shows that profits are maximized where $MRP(L)$ is equated to the marginal cost of labor (the lefthand side of (3)) where $\frac{1}{s} = (\frac{\partial\log L}{\partial\log w})^{-1}$ where $s$ is the elasticity of labor supply. ``Exploitation" is the amount by which marginal revenue product of labor (the amount of money the capitalist makes by employing one more worker) exceeds the wage. The rate of exploitation is often described as the ratio of exploitation ($MRP(L) - w$) to the wage which is $\frac{1}{s}$. Intuitively, if all workers quit the firm if the firm lowers its wage by a penny, exploitation is zero ($s = \infty$). If all workers do not quit in response to a decrease in the wage ($s < \infty$) then exploitation is positive. Note the rarified sense of this word. If the capitalist pays the worker a cent a year, and the worker's labor is worth one penny to the capitalist there is no exploitation.