{"id":3754,"date":"2020-03-02T14:31:56","date_gmt":"2020-03-02T14:31:56","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3754"},"modified":"2020-03-02T14:31:56","modified_gmt":"2020-03-02T14:31:56","slug":"relationship-between-tp-ap-and-mp","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/","title":{"rendered":"RELATIONSHIP BETWEEN TP, AP AND MP"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/#RELATIONSHIP_BETWEEN_TP_AP_AND_MP\" title=\"RELATIONSHIP BETWEEN TP AP AND MP\">RELATIONSHIP BETWEEN TP AP AND MP<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/#RELATIONSHIP_BETWEEN_TP_AP_AND_MP-2\" title=\"RELATIONSHIP BETWEEN TP AP AND MP\">RELATIONSHIP BETWEEN TP AP AND MP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"relationship-between-tp-ap-and-mp\"><span class=\"ez-toc-section\" id=\"RELATIONSHIP_BETWEEN_TP_AP_AND_MP\"><\/span><strong>RELATIONSHIP BETWEEN TP AP AND MP<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p>Product or output refers to the volume of goods produced by a\nfirm or an industry during a specified period of time. The concept of product\ncan be considered from three different angles \u2013 Total Product, Marginal\nProduct, Average Product.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>TOTAL PRODUCT (TP)<\/strong><\/p>\n\n\n\n<p>Total Product (TP) refers to the total quantity of goods\nproduced by a firm during a given period of time with the given number of\ninputs. <\/p>\n\n\n\n<p><strong>EXAMPLE: <\/strong>If 10\nlabourers produce 60 kg of rice, then the TP is 60 kg. <\/p>\n\n\n\n<p>In the short run a firm can expand TP by increasing only\nthe variable factors. However, in the long run, TP can be raised by increasing\nboth fixed and variable factors. TP is also known as \u2018Total Physical Product\n(TPP)\u2019 or \u2018Total Return\u2019 or \u2018Total Output\u2019.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>MARGINAL PRODUCT (MP)<\/strong><\/p>\n\n\n\n<p>Marginal Product (MP) refers to\nthe addition to TP, when one more unit variable factor is employed. MP can be\nwritten as,<\/p>\n\n\n\n<p>MP<sub>n<\/sub>&nbsp;= TP<sub>n<\/sub>&nbsp;\u2013 TP<sub>n-1<\/sub><\/p>\n\n\n\n<p>Where,<br \/>\nMP<sub>n<\/sub>&nbsp;= MP of n<sup>th<\/sup>&nbsp;unit\nof variable factor<br \/>\nTP<sub>n<\/sub>&nbsp;= TP of n units of variable factor<br \/>\nTP<sub>n-1<\/sub>&nbsp;= TP of (n-1) units of variable factor<br \/>\nn = number of units of variable factor<\/p>\n\n\n\n<p><strong>EXAMPLE: <\/strong>If 10 labourers make 60 kg of\nrice and 11 labourers make 67 kg of rice, then MP of the 11th labour will be<\/p>\n\n\n\n<p>MP<sub>11<\/sub>&nbsp;= TP<sub>11<\/sub>&nbsp;\u2013 TP<sub>10<\/sub><\/p>\n\n\n\n<p>MP<sub>11<\/sub>&nbsp;= 67-60 = 7 kg<\/p>\n\n\n\n<p>MP is the change in TP when one\nmore unit of variable factor is employed. However, when change in variable\nfactor is greater than one unit, then MP can be calculated as,<\/p>\n\n\n\n<p><strong>MP = Change in TP\/ Change in units of Variable Factor<\/strong><\/p>\n\n\n\n<p><strong>MP = \u0394TP\/\u0394N<\/strong><\/p>\n\n\n\n<p><strong>EXAMPLE:<\/strong> Suppose 2 labourers produce 60\nunits and 5 labourers produce 90 units, then MP will be,<\/p>\n\n\n\n<p>MP = &nbsp;90-60\/5-2 <\/p>\n\n\n\n<p>= 30\/3 <\/p>\n\n\n\n<p>= 10 units<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>AVERAGE PRODUCT (AP)<\/strong><\/p>\n\n\n\n<p>Average product (AP) refers to\noutput per unit variable input. For example, if TP is 60 kg of rice, produced\nby 10 labourers (variable input), then AP will be 60\/10 = 6 kg.<\/p>\n\n\n\n<p>AP is obtained by dividing TP by\nnumber of units of variable output. AP can be written as,<\/p>\n\n\n\n<p><strong>AP = TP\/Units of variable factor (n)<\/strong><\/p>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"relationship-between-tp-ap-and-mp-1\"><span class=\"ez-toc-section\" id=\"RELATIONSHIP_BETWEEN_TP_AP_AND_MP-2\"><\/span><strong><strong>RELATIONSHIP BETWEEN TP AP AND MP<\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The relationship between TP and MP is explained through the <a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Law of Variable Proportions. (opens in a new tab)\">Law of Variable Proportions.<\/a> As long as the the TP increases at an increasing rate, the MP also increases. This goes on till MP reaches maximum. When TP increases at a diminishing rate, MP declines. This continues till the point where TP is at its highest. When TP reaches its maximum point, MP becomes zero. This concept can be explained with the help of the following schedule and diagram:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"602\" height=\"243\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/RELATIONSHIP-BETWEEN-TP-AP.png\" alt=\"RELATIONSHIP BETWEEN TP AP.png\" class=\"wp-image-3756\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/RELATIONSHIP-BETWEEN-TP-AP.png 602w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/RELATIONSHIP-BETWEEN-TP-AP-300x121.png 300w\" sizes=\"(max-width: 602px) 100vw, 602px\" \/><figcaption><strong>RELATIONSHIP BETWEEN TP AP AND MP<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The\nabove table shows fixed factor of production i.e. land and variable factor of\nproduction i.e. labor. The total product initially increases and marginal\nproduct decreases. But after applying 6 units of labor on the fixed factor\nland, it becomes maximum i.e. 15. Here the Marginal Product is zero. As 8 units\nof variable factor are applied with fixed factor land, the total product\ndecreases and marginal product becomes negative. <\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/RELATIONSHIP-BETWENN-AP-MP-1.jpg\" alt=\"RELATIONSHIP BETWENN AP MP.jpg\" class=\"wp-image-3757\"\/><figcaption><strong>RELATIONSHIP BETWEEN TP AP AND MP<\/strong><\/figcaption><\/figure>\n\n\n\n<p>The diagram\nor curve shows three stages of production which are as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Stage I: <\/strong>MP &gt; 0, AP is rising. Thus, MP\n&gt; AP. This is increasing stage;<\/li><li><strong>Stage II.<\/strong> MP &gt; 0, but AP is falling.\nThus, MP &lt; AP, but TP is increasing because MP &gt; 0. This is diminishing\nstage.<\/li><li><strong>Stage III:<\/strong> MP &lt; 0 and TP is falling.\nThis is negative stage.<\/li><\/ul>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"conclusion\"><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><strong>CONCLUSION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>To conclude, the\nfollowing findings are found:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>When TP increases at an increasing rate, MP increases.<\/li><li>When TP increases at diminishing rate, MP declines<\/li><li>When TP is maximum, MP is Zero<\/li><li>When TP begins to decline, MP becomes negative<\/li><li>When MP > AP, this means that AP is rising<\/li><li>When MP = AP, this means that AP is maximum<\/li><li>When MP &lt; AP, this means that AP is falling<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/demand\/\">Theory of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-demand\/\">Law of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/demand-function\/\">Demand Function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/exceptions-of-law-of-demand\/\">Exceptions of law of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\">Elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/change-in-demand\/\">Change in demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/price-elasticity-of-demand\/\">Price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-law-of-demand-and-elasticity-of-demand\/\">Law of demand Vs Elasticity of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/factors-affecting-price-elasticity-of-demand\/\">Factors affecting price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/production-function\/\">Production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-short-run-long-run-production-function\/\">Short run vs long run production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\">Law of variable proportions<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/types-of-demand\/\">Types of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/managerial-economics\/\">Managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/characteristics-of-managerial-economics\/\">Characteristics of managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-managerial-economics\/\">Scope of managerial economics<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/utility-analysis\/\">Utility analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-marginal-utility\/\">Law of diminishing marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-equi-marginal-utility\/\">Law of equi marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium\/\">Consumers Equilibrium<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\">Indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve-analysis\/\">Consumer equilibrium using indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\">Relationship between TP, AP and MP<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-increasing-returns\/\">Law of increasing returns<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-returns\/\">Law of diminishing returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-constant-returns\/\">Law of constant returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\">Returns to Scale<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\">Economies and diseconomies of scale<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/concept-of-costs\/\">Concept of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-ac-and-mc\/\">Relationship between AC and MC<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/traditional-theory-of-cost\/\">Traditional theory of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/modern-theory-of-cost\/\">Modern theory of costs<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explicit-vs-implicit-costs\/\">Explicit vs Implicit costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue\/\">Revenue<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-competition\/\">Perfect competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\">Monopoly<\/a>&nbsp;<\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\">Price discrimination<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-and-monopoly\/\">Difference between perfect competition and monopoly<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\">Perfect Vs Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-and-monopolistic-competition\/\">Monopoly and monopolistic competition<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/product-differentiation-strategy\/\">Product differentiation strategy<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\">Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/national-income-in-india\/\">National Income in India<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/measurement-of-national-income\/\">Measurement of national income in India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/consumption-function\/\">Consumption function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/keynesian-psychological-law-of-consumption\/\">Keynes Psychological law of consumption<\/a><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"266\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg\" alt=\"RELATIONSHIP BETWEEN TP AP AND MP\" class=\"wp-image-787\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-300x78.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-768x199.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1536x398.jpg 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption>RELATIONSHIP BETWEEN TP AP AND MP<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>RELATIONSHIP BETWEEN TP AP AND MP Product or output refers to the volume of goods produced by a firm or an industry during a specified period of time. The concept of product can be considered from three different angles \u2013 Total Product, Marginal Product, Average Product. TOTAL PRODUCT (TP) Total Product (TP) refers to the&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;RELATIONSHIP BETWEEN TP, AP AND MP&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3755,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[113,92],"tags":[],"class_list":["post-3754","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-managerial-economics","category-micro-economics"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3754"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3754"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3754\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3755"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}