(Solved): For the total product curve shown in Figure 73, the marginal product of hiring the fourth unit o ...

Expert Answer

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TP increases at an increasing rate when MP increases. This pattern provides a Total Product Curve with a shape of convex. It then continues till MP reaches the maximum point of TP. Where MP declines and stays positive, TP increases at a decreasing rate. This pattern provides a Total Product curve with a shape of concave after reaching a point of inflection. It continues till the TP curve reaches its maximum. When MP is negative and declining, TP declines. In case MP is zero, TP reaches its maximum

TOTAL PRODUCT refers to the total amount of output that a firm produces within a given period when it utilises all the given inputs.

Total Product Formula is TP= AP*L
where AP is the AVERAGE PRODUCT/LABOUR UNIT AND L IS THE LABOUR.

Average Product: It is output per unit of inputs of variable factors.
Average Product (AP)= Total Product (TP)/ Labour (L).

Marginal Product: It denotes the addition of variable factors to the total product.
Thus, Marginal product= Changed output/ changed input. In other words marginal product leads to an increase of total product with the help of additional workers or input.