Total Product
What is Total Product?
Total Product is the total quantity of output produced by a firm using a given amount of inputs in a specific time period.
It increases as more variable inputs, like labor, are added to fixed inputs, like capital. Initially, total product rises at an increasing rate due to specialization, then at a decreasing rate due to diminishing returns.
Total Product: a worked example
A landscaping crew shares one truck and one set of mowers. Hiring 1 worker yields a total product of 12 lawns per week, 2 workers yield 28, 3 yield 42, 4 yield 50 and 5 yield 54. Marginal product is the change in total product per extra worker: 12, then 28 - 12 = 16, then 42 - 28 = 14, then 50 - 42 = 8, then 54 - 50 = 4. Diminishing marginal returns begin with the third worker, the first whose marginal product is smaller than the worker before. Total product still rises the whole way because every marginal product stays positive. Average product at 3 workers is 42 / 3 = 14 lawns, and by 5 workers it has slipped to 54 / 5 = 10.8 lawns.
The mistake students make with total product
Students read the phrase diminishing returns and immediately draw total product sloping downward. Diminishing marginal returns means the extra output from each new worker is getting smaller, not that output is falling. In the crew above, total product keeps climbing from 42 to 50 to 54 while marginal product drops from 14 to 8 to 4. Total product only turns down once marginal product goes negative, which happens when extra workers get in each other's way. On a graph the peak of total product sits directly above the point where marginal product crosses zero, not where marginal product peaks.
Total Product questions
What is the difference between total product and marginal product?
Total product measures the whole output produced with a given set of inputs, while marginal product measures the extra output from adding one more unit of the variable input. Total product is a level, marginal product is a change. If the fourth worker lifts weekly output from 42 lawns to 50, total product is 50 and that worker's marginal product is 8. Marginal product is also the slope of the total product curve at that point.
When does total product start to fall?
Total product falls only after marginal product turns negative. Adding workers to a fixed amount of capital eventually crowds the workplace, so an extra worker subtracts from output rather than adding to it. Up to that point total product keeps rising, quickly at first while specialization pays off and then slowly once diminishing marginal returns set in. Watch the marginal product column: the last positive entry marks the input level where total product peaks.
How do you find average product from a total product table?
Divide total product by the quantity of the variable input. Three workers producing 42 lawns give an average product of 42 / 3 = 14 lawns per worker. Average product rises while marginal product sits above it and falls once marginal product drops below it, so the two curves cross exactly at the peak of average product. That crossing is a favorite short answer question, and it follows from the same averaging logic that makes marginal cost cut average total cost at its minimum.
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