Question
Explain the relationship between the marginal products and the total product of an input.
Solution
(a) Relationship between MPP and TPP
Note. Since MPP is addition to TPP, it also implies that if MPP is positive, TPP must be increasing and if MPP is negative (-), TPP must be decreasing.
(i) When MPP rises, TPP rises at an increasing rate. (It is up to 4th unit of labour in the above schedule).
(ii) When MPP falls but is positive, TPP rises at a diminishing rate. (It is from 5th to 7th unit of labour in the schedule).
(iii) When MPP is zero, TPP is maximum. (It is indicated by 8th unit.)
(iv) When MPP falls but is negative (-), TPP declines. (It is shown by 9th unit of labour in the above schedule).
