What is a total product?
Suppose we differentiate an input and keep all the other inputs unchanged, then for different degrees of that input we get different degrees of output. This association between the variable input and output, keeping all the other inputs unchanged is often referred to as total product (TP) of the variable input. This is also sometimes termed as the total return or total physical product of the variable input. It will be helpful to elucidate the concepts of average product (AP) and marginal product (MP). They are useful in order to explain the contribution of the variable inputs to the production procedure.
What is an average product?
Average product is explained as the output per unit of the variable input. We can calculate it as follows:
APL = TPL/L
What is a marginal product?
Marginal product of an input is explained as the change in the output per unit of change in the input when all the other inputs are held unchanged. When the capital is held unchanged, the marginal product of labour is as follows:
MPL = Change in output/Change in input
Since the inputs cannot take the negative values, the marginal product is unexplained at zero degree of the employment of input. For any degree of an input, the sum of marginal products of every foregoing unit of that input gives the total product. So, the total product is the sum of marginal products.
Total Product, Marginal Product, and Average Product
An average product of an input at any degree of employment is the aggregate of all the marginal products up to that degree. According to the variable inputs, the average and marginal products are often mentioned as the average and marginal returns.
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