Marginal Product vs Average Product
Marginal Product and Average Product are two Production & Costs concepts in AP Economics that students often mix up. In short: marginal product is marginal Product is the additional output produced by adding one more unit of a variable input, holding all other inputs constant. Meanwhile, average product is average Product is the total output produced per unit of a variable input, typically labor. Here is how they compare side by side.
Marginal Product is the additional output produced by adding one more unit of a variable input, holding all other inputs constant.
It is calculated as the change in total product divided by the change in the variable input. Marginal product typically rises at first due to increased efficiency, then falls due to the law of diminishing marginal returns.
Average Product is the total output produced per unit of a variable input, typically labor.
It is found by dividing total product by the quantity of the variable input used. Average product rises when marginal product is above it and falls when marginal product is below it.
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