WAEC - Economics (2015 - No. 19)
By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to
average product
total product
average variable cost
total cost
Vysvětlení
Total product is the overall quantity of output that a firm produces, usually specified in relation to a variable input. Total product is the starting point for the analysis of short-run production. It indicates how much output a firm can produce according to the law of diminishing marginal returns.
Marginal Product (MP) = Change in Total Product / Change in Variable Factor
Total Product (TP) = AP X Variable Factor