Difference between marginal product and average product
Answers
Answer:
An organization is a systematic collection of people, who work together for achieving the desired end, under a common identity. ... An organization is governed by rules, regulations and policies, whereas customs and values are the regulating factors of an institution.
Answer:
The function that explains the relationship between physical inputs and physical output (final output) is called the production function.
Find:
Difference between marginal product and average product
Given:
Difference between marginal product and average product
Explanation:
Average Product -
It is defined as the output per unit of factor inputs or the average of the total product per unit of input and can be calculated by dividing the Total Product by the inputs (variable factors).
Average Product = Total Product/ Units of Variable Factor Input
Marginal Product -
The additional output produced as a result of employing an additional unit of the variable factor input is called the Marginal Product. Thus, we can say that marginal product is the addition to Total Product when an extra factor input is used.
Marginal Product = Change in Output/ Change in Input
There exists an interesting relationship between Average Product and Marginal Product. We can summarize it as under:
• When Average Product is rising, Marginal Product lies above Average Product.
• When Average Product is declining, Marginal Product lies below Average Product.
• At the maximum of Average Product, Marginal and Average Product equal each other.
Marginal product focuses on the changes between production totals and the quantity of resources. Average product shows output at a specific level of input. The peak of the average product curve is the point at which the marginal product curve and average product curve intersect. For the points below (to the left of) this point, the marginal product of the extra input is higher than the average product. For example, if adding another worker increases output by more than the average product of the total labor force, then the marginal product of the new worker will raise the average product amount. Thus, the average product curve must be below the marginal product curve. Similarly, if the new worker adds less product than the average product amount, the average product curve will be above the marginal product curve (for all points to the right of the point of intersection of the two curves). At the point of intersection, the additional worker produces the same as the average product of the total workforce; there will be no change.
#SPJ3