Total and Marginal Product

Over the range of inputs there are four possible relationships between Q and L

(1) TP or Q can increase at an increasing rate. MP will increase.

(2) TP may pass through an inflection point, in which case MP will be a maximum. TP or Q may increase at a constant rate over some range of output. In this case, MP will remain constant in this range.

(3) TP might increase at a decreasing rate. This will cause MP to fall. This is referred to as "diminishing MP." I

(4) If "too many" units of the variable input are added to the fixed input, TP can decrease, in which case MP will be negative. Any addition of L beyond LB will reduce output; the MP of the input will be negative.

It would be foolish to continue adding an input (even if it were "free") when the MP is negative.

The relationship between the total product (TP) and the marginal product (MP) can be shown in Figure.

_Qx

TP_x

MP_x

АР_х

0 А В С (Х)

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