Relationship between TP, AP and MP | Production Function | Class 12 Microeconomics | Ecoholics

Описание: Consumers and producers both play a crucial role in the efficient operation of an economy. A producer uses a variety of inputs to create commodities and services. Production is an essential economic activity since it transforms the product into the form consumers require, increasing its utility. It helps transform the raw materials into some desirable product. In simple words, it includes the transformation of input into output.
The product concept can be seen from three different perspectives:

Total Product
Marginal Product
Average Product
1. Total Product (TP):
Total Product refers to the total quantity of goods produced by a firm during a given period of time with a given number of units

2. Average Product (AP):
Average Product refers to output per unit of a variable input.

3. Marginal Product (MP):
Marginal Product refers to the addition to the total product when one more unit of a variable factor is employed. It calculates the extra output per additional unit of input while keeping all other inputs constant. Other names of Marginal Product are Marginal Physical Product (MPP) or Marginal Return.

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