Relationship between marginal and average product
Also called: MP-AP relationship · Topic: Production Function, Returns and Costs · NCERT: Class 12, Ch 3 "Production and Costs"
Meaning
Marginal product (MP) and average product (AP) are linked. For the first unit of input, MP = AP. While MP is above AP, AP rises. When MP falls below AP, AP falls. So MP cuts AP from above at AP's maximum point. Both curves are inverse U-shaped. MP can become zero or negative, but AP stays positive while total product is positive.
Example
In NCERT Table 3.2, the first worker gives MP = AP = 10. The 2nd and 3rd workers add 14 and 16, both above the average, so AP rises to 13.33 at 3 workers. The 4th worker adds only 10, below 13.33, so AP falls to 12.5. It works like exam marks: your average rises only if the new test score is above your current average.
Don't confuse with
- Relationship between MC and AC: on the cost side, marginal cost cuts average cost from below, at average cost's minimum. On the product side, MP cuts AP from above, at AP's maximum.