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
WORLD TRADE ORGANISATION (WTO): The International Trade Organisation (ITO), originally, was proposed to be set up along with the World Bank and the IMF on the recommendations

use a graphical illustration to describe briefly what the influence of each of the following be on the market supply of labour,(a) an increase in immigrants, (b) a reduction in wag

Risk Premium - The risk premium is amount of money which a risk averse person would pay to keep away from taking a risk. *  Risk Premium: A Scenario - The person has a 5%

What is the distinguishing characteristic of institutions in the public purpose sphere? The distinguishing characteristic of institutions in the public purpose sphere is that t

Development Administration: Since the Government has been entrusted to manage economic and business activities, it was found difficult to manage the economic policy with the t

Location of industry and localization of industry: Location of industry tries to answer the key economic question "where to produce". It involves deciding on the area that an

Modern economy: It explored the role of money in every modern economy.The chapter also revealed that it is necessary for the government to ensure consistency between the quant

Price | Quantity demanded _________________________ 0 250 50 200 100 150 150 100 200 50 250 0 A) Calculate Lorie''s profit-maximizing output, price, and economic profit. B) Do yo

Demand and supply curve for french breads

How can we test adulterants in vegetable oils?