Marginal product
Also called: MP, marginal return · Topic: Production Function, Returns and Costs · NCERT: Class 12, Ch 3 "Production and Costs"
Meaning
Marginal product (MP) is the change in output from one more unit of an input, with all other inputs held constant. It is also called marginal return. The formula is MP_L = ΔTP_L / ΔL, which equals TP at L units minus TP at (L − 1) units. MP is undefined at zero input. Adding up all the MPs gives total product. MP is inverse U-shaped: it rises first, then falls, and can become zero or negative. Total product is at its maximum where MP = 0.
Example
In NCERT Table 3.2, with capital fixed at 4 units, total product rises from 24 to 40 when the 3rd worker joins, so MP = 16. The 6th worker adds only 1 unit (56 to 57) because the fixed land is crowded.
Don't confuse with
- Average product: AP is output per worker on average. MP is the extra output from the last worker only.