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- If there are two inputs, input 2 is fixed at k, and the two inputs are perfect substitutes then the total product function takes the form TP (z 1) = az 1 + bk so that the marginal product function of input 1 is MP (z 1) = a, the average product function of input 1 is AP (z 1) = a + bk / z 1.
economics.utoronto.ca/osborne/2x3/tutorial/MPEX.HTMExamples and exercises on marginal and average product functions
Apr 6, 2023 · MP is the change in TP when one additional unit of variable factor is used. However, when the change in variable factor exceeds one unit, MP can be calculated as: For example, 2 labours produce 60 kg of rice and 4 labours produce 100 kg of rice, then MP will be:
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. ∆TPL/∆L.
Apr 6, 2023 · Formula: MP n = TP n – TP n-1. Where, MP n = Marginal product of n th unit of the variable factor. TP n = Total product of n units of the variable factor. TP n-1 = Total product of (n-1) units of the variable factor. n = Number of units of the variable factor. One more way to calculate MP.
- Total Product. The total product refers to the total amount (or volume) of output produced with a given amount of input during a period of time. Therefore, a firm wanting to increase its Total Product in the short run will have to increase its variable factors as the fixed factors remain unchanged (that is why they are ‘fixed’ in the short run).
- Marginal Product. The total product can be calculated by adding subsequent marginal returns to an input (also known as the marginal product). The increase in output per unit increase in input is called Marginal Product.
- Average Product. Average product, as the name suggests, refers to the per unit total product of the variable factor (here, labour). Hence, the calculation of Average Product is also very simple.
- TP, MP, AP: Shape of the Curves. When we take a look at the figure below, the following can be noted about the shapes of the TP, MP and AP curves. The TP curve first increases at an increasing rate, after which it continues to increase but at a decreasing rate, giving the curve an S-shape.
Total Product Formula is. TP= AP*L. Where AP= product/ labour unit; L= Labour. Average Product. It is output per unit of inputs of variable factors. Average Product (AP)= Total Product (TP)/ Labour (L). Marginal Product. It denotes the addition of variable factors to the total product.
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The equation to calculate MP is as follows: Where: TP1 – Total Product at time 1. TP0 – Initial total product. K0 – Initial number of units of the factor of production. K1 – Number of units of the factor of production at time 1. Average Product (AP)
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MP(z 1) = Auz 1 u 1 k v and the average product function of input 1 is AP(z 1) = Az 1 u 1 k v. These functions are illustrated in the following figure. Specifically, if A = 1 and u = v = 1/2, for example, MP(z 1) = (1/2)z 1 1/2 k 1/2 = k 1/2 /(2z 1 1/2) and AP(z 1) = z 1 1/2 k 1/2 = k 1/2 /z 1 1/2. Exercise
