What is Total Product, Average Product And Marginal Product

What is Total Product?

Suppose we differ a single input and keep all 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 other inputs unchanged, is often referred to as Total Product (TP) of the variable input. This is also sometimes termed as total return to 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 input to the production procedure.

What is Average Product?

Average product is explained as the output per unit of variable input. We calculate it as :

APL= TPL / L

What is Marginal Product?

Marginal product of an input is explained as the change in output per unit of change in the input when all other inputs are held unchanged. When capital is held unchanged, the marginal product of labour is :

MPL = Change in output / Change in input

TPL / ∆L

Since inputs cannot take negative values, marginal product is unexplained at zero degree of input employment. For any degree of an input, the sum of marginal products of every foregoing unit of that input gives the total product. So total product is the sum of marginal products.

Total Product, Marginal product and Average product

Labour

TP

MPL

APL

0

0

1

10

10

10

2

24

14

12

3

40

16

13.33

4

50

10

12.5

5

56

6

11.2

6

57

1

9.5

Average product of an input at any degree of employment is the aggregate of all marginal products up to that degree. Average and marginal products are often mentioned to as average and marginal returns, accordingly, to the variable input.

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