What happens to TPP when the MPP of the variable input is negative? Why?
TPP falls when MPP is negative. MPP defines the slope of TPP. When MPP is negative, the slope of TPP is negative, which means TPP is falling in this area.
When TPP is maximum, what can we say about MPP? Why?
What will you say about MPP of a factor when TPP falls?
What will you say about MPP of a factor when TPP rises at diminishing rate?
The following table gives the MPP of a factor. It is also known that the TPP at zero level of labour is zero. Determine its TPP and APP schedules.
Units of labour123456EmploymentMPP50110150180180150
The following table gives the APP of a factor, it is also known that the TPP at zero level of labour is zero. Determine its TPP and MPP schedule.
Units of labour12345APP5045403530