Advertisements
Advertisements
Question
Explain the relationship between the marginal products and the total product of an input.
Solution
Relationship between marginal products (MP) and the total product (TP) can be represented graphically as
1) TP increases at an increasing rate till point K, when more and more units of labour are employed. The point K is known as the point of inflexion. At this point MP (second part of the figure) attains its maximum value at point U.
2) After point K, TP increases but at a decreasing rate. Simultaneously, MP starts falling after reaching its maximum level at point U.
3) When TP curve reaches its maximum and becomes constant at point B, MP becomes zero.
4) When TP starts falling after B, MP becomes negative.
5) MP is derived from TP by
`"MP ="(Delta"TP")/(DeltaL)`
Or, MP = TPn - TPn-1
APPEARS IN
RELATED QUESTIONS
Define marginal product.
State the behaviour of marginal product when only one input is increased and other inputs are hold constant.
Give the meaning of producer’s equilibrium. A producer that quantity of his product at which marginal cost and marginal revenue are equal. Is he earning maximum profits? Give reason for your answer.
State whether the following statements are true or false. Give reasons for your answer:
(i) When marginal revenue is constant and not equal to zero, then total revenue will also be constant.
State whether the following statements are true or false. Give reasons for your answer:
As soon as marginal cost starts rising, average variable cost also starts rising.
State whether the following statements are true or false. Give reasons for your answer:
Total product always increases whether there is increasing returns or diminishing returns to a factor.
What is the marginal product of an input?
The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
|
L |
TPL |
|
0 |
0 |
|
1 |
15 |
|
2 |
35 |
|
3 |
50 |
|
4 |
40 |
|
5 |
48 |
The following table gives the average product schedule of labour. Find the total product and marginal product schedules. It is given that the total product is zero at zero level of labour employment.
|
L |
APL |
|
1 |
2 |
|
2 |
3 |
|
3 |
4 |
|
4 |
4.25 |
|
5 |
4 |
|
6 |
3.5 |
