what is the relationship between marginal product and average product?
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Relationship between Average Product and Marginal Product When Average Product is rising, Marginal Product lies above Average Product. When Average Product is declining, Marginal Product lies below Average Product. At the maximum of Average Product, Marginal and Average Product equal each other.
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Marginal Revenue: This is the change in total revenue resulting from an incremental change in the quantity of the output produced. Marginal Revenue Product: This is the change in total revenue resulting from an incremental change in the quantity of the variable factor input used.
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The relationship between average revenue and marginal revenue is the same as between any other average and marginal values. When average revenue falls marginal revenue is less than the average revenue. When average revenue remains the same, marginal revenue is equal to average revenue.
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Marginal cost represents the total cost to produce one additional unit of product or output. Marginal product is the extra output generated by one additional unit of input, such as an additional worker.
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Both deal with “marginal” which means the value of the next thing consumed, in the case of utility, or produced, in the case of product. Marginal utility specifically refers to the amount of utility (roughly translated as consumer satisfaction) that the consumer gets from the next unit consumed.
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A Value of Marginal Product (VMP) is arrived at by multiplying the marginal physical product by the average revenue or the price of the product. The formula for calculating VMP is; Physical product × sales price of product. VMP calculates the amount of a firm's revenue that a unit of productive output contributes.
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Relationship Between Average and Marginal Cost When the average cost declines, the marginal cost is less than the average cost. When the average cost increases, the marginal cost is greater than the average cost.
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In economics, the marginal product of labor (MPL) is the change in output that results from employing an added unit of labor. It is a feature of the production function, and depends on the amounts of physical capital and labor already in use.
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where z is the marginal utility per dollar measured in utils (zA = MUA/PA, zB = MUB/PB), x is the amount spent on product A, and y is the amount spent on product B. Assume that the consumer has $15 to spend on A and B—that is, x + y = $15.
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The marginal product curve crosses the average product curve at the maximum of the average product curve. Marginal product focuses on the changes between production totals and the quantity of resources. Average product shows output at a specific level of input.
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The marginal revenue product of a worker is equal to the product of the marginal product of labor (MPL) and the marginal revenue (MR) of output, given by MR×MP: = MRPL. This can be used to determine the optimal number of workers to employ at an exogenously determined market wage rate.
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Short Run Production Process Total Product (TP or Q) is the total amount of output produced. Marginal Product (MP) of labor is the increase in output resulting from a one-unit increase in the amount of labor employed. Average Product (AP) of labor equals total output divided by the amount of labor employed.
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In microeconomics, marginal revenue (MR) is the additional total revenue that will be generated by increasing product sales by one unit. In a perfectly competitive market, the additional revenue generated by selling an additional unit of a good is equal to the price the firm is able to charge the buyer of the good.
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Marginal Utility. Marginal satisfaction is the additional satisfaction received after the consumption of a good. Marginal utility changes with the changes in the consumption level of the consumer. The marginal utility can be calculated by dividing the change in total quantity by the change in quantity demanded.
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The relation between total and marginal utility is explained with the help of Table 1. So long as total utility is increasing, marginal utility is decreasing up to the 4th unit. When total utility is maximum at the 5th unit, marginal utility is zero. It is the point of satiety for the consumer.
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Relationship between Marginal Product and Average Product. The marginal product curve crosses the average product curve at the maximum of the average product curve. Marginal product focuses on the changes between production totals and the quantity of resources. Average product shows output at a specific level of input.
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Average product, which more often goes by the shorter name average product (AP), is one of two measures derived from total physical product. The other is marginal physical product. Average physical product is the output produced per unit of input used.