Total, Average and Marginal Product.pptx

1. TOTAL PRODUCT, AVERAGE PRODUCT AND MARGINAL
PRODUCT

2. TOTAL PRODUCT
 Total product (TP) is the total quantity of goods or services
produced by a firm with the given input during a specific period
of time.
 Total product (TP) will be helpful to elucidate the concepts of
average product (AP) and marginal product (MP).
 Total product (TP) is the total output produced by a firm using a
given quantity of inputs, such as labor

3. AVERAGE PRODUCT
 Average product is the amount of output produced per
unit of a variable factor during time period.
 The average product is the total product divided by the
total amount of inputs used in production.
 Average product =Total product /Total inputs used

4. MARGINAL PRODUCT
 The marginal product is the additional amount of output
produced by using one additional unit of input, while holding all
other inputs constant.
 marginal product is the change in total product due to the
change in employing one extra unit of a variable factor.
 Marginal product = Change in total output / Change in quantity
of input used

5. 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