Question

Define marginal product.

Answer 1

Marginal Product (MP) is the additional output attributed to an additional unit of the variable factor, other factors remaining constant. For example, if there is an increase in the output with more labour (1 unit), then

MP_n = TP_n - TP_n-1

where

MP_n = Marginal product of the nth unit of labour

TP_n = Total product produced with n units of labour

TP_n-1 = Total product produced with (n - 1) unit of labour