Marginal product of a factor, Microeconomics

Marginal Product (MP) of a Factor:

From the above mentioned production function, immediately we can study the effect on total output when there is a variation in labour utlilisation, keeping the other factor K, fixed. Thus, we have the marginal physical product, which shows the change in output quantity for a unit change in the quantity of an input, (L), when all other inputs (K) are held constant. Mathematically, it is given by the first partial derivative of a production function with respect to labour. Thus,   

2340_Marginal Product (MP) of a Factor.png

It is reasonable to expect that the marginal product of an input depends on the quantity used of that input. In the above example, use of labour is made keeping the amount of other factors (such as equipments and land) fixed. Continued use of labour would eventually exhibit deterioration in its productivity. Thus, the relationship between labour input and total output can be recorded to show the declining marginal physical productivity. Mathematically, the diminishing marginal physical productivity is assessed through the second-order partial derivative of the production function.  Thus, change in labour productivity can be presented as:  

1223_Marginal Product (MP) of a Factor1.png


210_Marginal Product (MP) of a Factor2.png

Posted Date: 10/26/2012 6:06:39 AM | Location : United States

Related Discussions:- Marginal product of a factor, Assignment Help, Ask Question on Marginal product of a factor, Get Answer, Expert's Help, Marginal product of a factor Discussions

Write discussion on Marginal product of a factor
Your posts are moderated
Related Questions

Calculate the cross-price elasticity of demand between computers and printers, where a 10 percent decrease in the price of computers results in a 15 percent increase in the quantit

when the demand function is 2Q-24+3P=0,find the marginal revenue when Q=3.

discuss how a knowledge of price elasticity and income elasticity be of practical use to a firm

Arbitrage Pricing Theor y Arbitrage defines the procedure of continuously buying a security for privacy, currency, or commodity on one market and selling it in another

Fixed costs are those which are independent of output that is they do not change with changes in output. These costs are a fixed amount which must be incurred by a firm in the shor

Unemployment: Unemployment refers to a situation where people who are willing and able to work do not find jobs at the existing wage rate.For a person to be referred to as une

Input-Output Models Input-output models are used in economics of education in studies of cost-quality and education-labour-earnings relationships. Different levels and forms

Welfare Analysis 1-Of the following four institutions for allocating apartment to different people at different prices   i.  The competitive market  ii.  A discriminatin

Social cost: Social cost of production refers to the cost incurred by a society when its economic resources are used to produce a given commodity. The usage of a society’s res