Question

Calculate Ap and Mp when Tp 50,110,150,180,180,150​

Answer 1

Answer:

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Total Product

The total product refers to the total amount (or volume) of output produced with a given amount of input during a period of time. Therefore, a firm wanting to increase its Total Product in the short run will have to increase its variable factors as the fixed factors remain unchanged (that is why they are ‘fixed’ in the short run).

In the long run, as we know that all factors become variable, the firm can increase its total product by increasing any of its factors as all factors become variable. The concept of Total Product helps us understand what is called the Marginal Product.

Marginal Product

The total product can be calculated by adding subsequent marginal returns to an input (also known as the marginal product). The increase in output per unit increase in input is called Marginal Product. Thus, if we were to assume Labour as the input used in the production process (say), then Marginal Product can be calculated as-

MP = Change in output/ Change in input (here, labour)

TP = ƩMP

Average Product

Average product, as the name suggests, refers to the per unit total product of the variable factor (here, labour). Hence, the calculation of Average Product is also very simple.

AP = Total Product/ units of variable factor input = TP/L

Note that Total Product can also, therefore, be calculated as TP = AP x L

TP, MP, AP: Shape of the Curves

When we take a look at the figure below, the following can be noted about the shapes of the TP, MP and AP curves.

Shapes of Total Product, Average Product and Marginal Product

Source: TeX StackExchange

The TP curve first increases at an increasing rate, after which it continues to increase but at a decreasing rate, giving the curve an S-shape. This trend continues till TP reaches its maximum. Here, MP =0. After the maximum, TP starts to fall or it declines.

The MP curve also initially increases, reaches its maximum and then declines. Note that the maximum of MP is reached at the point where TP starts to increase at a diminishing rate. An interesting fact is that MP can also be negative, whereas TP is always positive even when it declines.

The AP curve also shows a similar trend as the MP. It rises, reaches its maximum and then falls. At the point where AP reaches its maximum, AP = MP.

All – TP, MP and AP curve