Average product and marginal product, Microeconomics

Assignment Help:

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


Related Discussions:- Average product and marginal product

Law of diminishing marginal utility, law of diminishing marginal utility it...

law of diminishing marginal utility its assumptions, limitation, and its practical importance

Production, explain 6 factors that determine volume of production

explain 6 factors that determine volume of production

Consumer''s eqillibrium, a consumer consumes only two goods x and y is in e...

a consumer consumes only two goods x and y is in eqillibrium price of x falls explain the reaction of consumer through utility analysis

Basic questions to be answered by economic institution, What are the basic ...

What are the basic questions to be answered by economic institution? Four fundamental questions should be answered by any economic institution as: a. What goods and services

Optimization, This is the practice of maximizing profits and revenues and m...

This is the practice of maximizing profits and revenues and minimizing costs, using marginal analysis.

Microeconomics, 1. By using the Production possibility Curve (PPC), analyze...

1. By using the Production possibility Curve (PPC), analyze the microeconomic theories such as scarcity, choices and opportunity costs. Provide relevant graph with numerical exampl

Money demand function, what are the values of real money supply and the cur...

what are the values of real money supply and the current price level

Source of economic growth and development, Question: (a) Explain the fa...

Question: (a) Explain the factors that contributed to the adoption of structural adjustment programme by a majority of Least Developed Countries in the 1980s? (b) Describe t

Wage labour, Wage Labour: A form of work in that employees perform labour f...

Wage Labour: A form of work in that employees perform labour for others, under their direction, in return for salaries orwages. Employer controls and owns the product of the labour

Laws of economics, Do the laws of economics still work today? use the case ...

Do the laws of economics still work today? use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can shift the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd