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

Question 1: i) Derive and explain Harberger's (1954) welfare loss estimates of monopolizing a perfectly competitive firm. ii) What are the roles of advertising? Can it lead

What is the difference between economics and business?  Economics is the study of how we, the people, engage ourselves in production, distribution and consumption of goods and

what are tne methots of demand forecasting ?

(a) Suppose Scientists discover that eating soybeans prevents cancer and heart disease.


explain the traditional theory of cost with suitable diagrams.explain why LAC curve is not U shaped?

the law diminishing marginal utility explain through flow chart

Production: - Firms should choose how much of each to produce. - The alternative quantities can be illustrated by using product transformation curves. Product Transforma

reaction of mechanism of nitrous acid with benzene diazonium chloride in presence of Cuperous oxide