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Production And Costs

Question
CBSEENEC12013592
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Define marginal product. State the behaviour of marginal product when only one input is increased and other inputs are hold constant.

Solution

Marginal Product (MP) is defined as an additional output or net addition to the total output when an additional unit of the variable factor is employed keeping other factors remain constant. 
MP = TPn - TPn-1
where
MPn -Marginal product of nth unit of labour
TPn -Total product produced with n units of labour
TPn-1 = Total product produced with (n - 1) unit of labour
When only one input is increased and other inputs are hold constant, the MP will be

Units of Variable Factor TP MP Change in the MP Curve
0 0 - MP Curve increases at an increasing rate till 3rd unit
1 4 4
2 12 8
3 24 12
4 32 8 MP curve continues to fall from 5th unit
5 34 2
6 30 -4 MP curve continues to fall and it becomes negative from 6th unit

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