Relationship between Average Product (AP) and Marginal Product (MP)

• Average Product (AP): Output per unit of the variable factor (here, per worker).
• Marginal Product (MP): Extra output produced when one more unit of the variable factor (one more worker) is added, keeping other inputs fixed.

Think of a group of workers in a factory (or students in a class test):

• AP = average output per worker (like average marks of all students).
• MP = extra output of the last worker added (like marks of the new student who joins the class).​

Use this rule:

1) When MP > AP → AP rises

• If the extra worker produces more than the current average, the average output of all workers increases.
• In the original table example, this happens up to the 4th unit of labour (AP was rising there).​

Analogy:

• Suppose four students have an average of 60 marks.
• A fifth student joins with 80 marks (MP = 80, AP = 60).
• New average will be higher than 60. So, MP > AP pulls AP up.

2) When MP = AP → AP is maximum and constant

• At this point, adding one more worker gives extra output exactly equal to the current average.
• So the average neither rises nor falls; this is the highest value of AP.
• In the given example, this occurs when 5 workers are employed.​

3) When MP < AP → AP falls

• If the extra worker produces less than the current average, the average output of all workers comes down.
• In the table in your book, this starts from the 6th worker onwards.​

Analogy:

• If four students have an average of 80 and a new student joins with only 40 marks, the overall average will fall because MP (40) < AP (80).

4) Sign of MP and AP

• MP can be positive, zero, or negative, depending on the stage of production.​
• AP is always positive as long as total output is positive (because AP = TP ÷ units of labour, and both are positive).

Imagine a graph with:

• Horizontal axis: units of labour.
• Vertical axis: AP and MP (output per worker).​

Key features:

1) MP above AP → AP rising

• As long as the MP curve lies above the AP curve, the AP curve slopes upward (rises).
• It does not matter whether MP itself is rising or falling; what matters is that MP is still greater than AP.

2) MP = AP at AP’s maximum point

• The MP curve cuts the AP curve at AP’s highest point.
• At this intersection point (often marked as point A), AP is maximum and MP = AP.​

3) MP below AP → AP falling

• When MP lies below AP, the AP curve slopes downward (falls).
• This happens after point A in the diagram.

Suggested sketch (text description):

• Draw labour on X‑axis, product on Y‑axis.
• Draw a hump‑shaped MP curve (rises, then falls).
• Draw a hump‑shaped AP curve that lies below MP at first, touches MP at its highest point, then stays above MP later.
• Mark the intersection as point A (AP max, MP = AP).

• AP = output per unit of variable factor; MP = extra output from one more unit.​
• When MP > AP, AP rises; when MP = AP, AP is maximum; when MP < AP, AP falls.​
• The MP curve cuts the AP curve at the maximum point of AP.​
• MP can be positive, zero, or negative; AP stays positive as long as output is positive.​
• The AP–MP relationship follows the general “marginal vs average” rule used in many areas of economics.