Average product and marginal product, Microeconomics

Average product and marginal product:

Average product (AP) is the output per unit of the variable factor employed. In other words, it is the productivity of the variable factor (VF). It is measured by dividing total product (TP) by amount of variable factor employed. i.e

 

574_Average product and marginal product.png

Average product is measured in respect of a variable factor. Where the variable factor is say labour (L), then it is the average product of labour (APL) or the productivity of labour that we can measure as:

22_Average product and marginal product1.png


Where the variable factor is capital (K), then can measure the average product of capital (APK) or the productivity of capital as:

9_Average product and marginal product2.png


Marginal product is the change in total product resulting from the use of one more (or less) unit of a variable factor. It may also be explained as the rate of change in total product with respect to a variable factor (ΔVF), i.e.

2012_Average product and marginal product3.png


where ? = change. Marginal product is also calculated in respect of variable
factor. The MP of labour (MPL) as:

 

137_Average product and marginal product4.png

Posted Date: 1/2/2013 7:29:59 AM | Location : United States







Related Discussions:- Average product and marginal product, Assignment Help, Ask Question on Average product and marginal product, Get Answer, Expert's Help, Average product and marginal product Discussions

Write discussion on Average product and marginal product
Your posts are moderated
Related Questions
what happen when a new resources has been discovered for computer

Price Level:Overall average level of nominal prices in the economy can be calculated, most often as a weighted average of the prices of individualservices and goods (with weighting

how to estimate costs?

AVOGADRO''S HYPOTHESIS In equal volumes of gases including all under similar conditions of temperature & pressure keeps equal number of molecules. Avogadro''s law and Applicatio

Prove that the utility approach and the indifference curve approach yield the same consumer equilibrium.

BUREAUCRACY: M de Gournay, an economist of France, first coined the word Bureaucracy in the eighteenth century to refer to "a fourth or fifth form of Government" in which "off


The monetary calculate of the welfare associated with the change in the provision of some good. It is not to be confused with monetary value, unless the latter is explicitly desig

List four characteristics of monopolistic competition

Assume that the market equilibrium rent for two-bedroom apartments in Santa Monica, California is $1500 per month and the quantity is 40,000 units. The city council of Santa Monica