Total Product, Average Product and Marginal Product

 

1.    

        Total Product (TP)

It refers to the total amount of output produced by using the variable factor keeping the factor fixed. In other words, it refers to the total units of output produced by the given level of fixed inputs and variable factors. The amount of total product changes with the change in quantity of variable factor. Mathematically;

TP= Summation of MP, TP=AP*L

Total Product Curve

It is drawn on the assumption that the total volume of fixed factor i.e Capital remains constant. TP curves starts from the origin, initially increases at an increasing rate, then increases at decreasing rate, reaches a maximum point and finally begins to decline. Thus, as more variable factors are employed, it not always increases the TP.

Units of Labor	Total Product (in Units)
0	0
1	10
2	30
3	60
4	80
5	90
6	90
7	80

2.    

             Average Product (AP)

It is per unit product of the variable factor. In other words, AP is obtained by dividing total product by the total unit of variable factor i.e. labor. Mathematically;

AP=Total Product/L

Average Product Curve

It begins from the origin. As the units of variable factors are increased, it increases at a decreasing rate, reaches a maximum point and then begins to decline. It is inverted U-shaped. As long as TP is positive, AP is positive.

Units of Labor	TP	AP
0	0	0
1	10	10
2	30	15
3	60	20
4	80	20
5	90	18
6	90	15
7	80	11.4

 

 

3.    Marginal Product (MP):

It is the change in the total product due to the change in the variable factor. In other words, it is the addition to the TP by the employment of an additional unit of a variable factor. Mathematically;

MP=dTP/dL

Marginal Product Curve

Initially, the MP curve rises, reaches a maximum point and then begins to decline. When TP is maximum, MP is zero. When TP falls, MP is negative.

Units of Labor	TP	MP
0	0	0
1	10	10
2	30	20
3	60	30
4	80	20
5	90	10
6	90	0
7	80	-10

 

Marginal Product Curve