CONCEPTS OF TOTAL AVERAGE AND MARGINAL PRODUCTIVITY

           CONCEPTS OF TOTAL AVERAGE AND MARGINAL PRODUCTIVITY. Total Product (TP): Definition:

Total product is defined as the total quantity of commodities produced at a particular t result of the combination of all the factors of production.

Total product is expressed mathematically as:          TP =AP x Labour

Example

If 30 men were employed in a farm and produce an average of 15 tones of cassava j person, calculate the total product.

Solution

TP    =       AP x Labour

TP    =       15 tonnes x 30

=      450 tonnes

  • Average Product (AP): Definition: Average product (AP) is defined as the output per unit of the variable factor (Labour or Capital) employed.
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This is obtained by dividing the total output by the number of labour or capital

AP can be expressed mathematically as:

AP =                   Total Product (Output)

No. of labour (or capital) employed

Example

If 3,000 tonnes of cassava were harvested by 60 men in a farm on daily basis, calculate the average output

AP              Total Output

                        No. of labour (men)

=          3,000 tonnes

     60men

            =          50tonnes/person

  • Marginal Product (MP): Definition: the marginal product (MP) may be defined as the addition to total output brought about as a the employment of an additional unit of variable factor.

MP can be expressed mathematically as:

             Changes in TP

MP      =         Changes in variable factor

Example

If 2,080 tonnes of cassava were harvested from the same farm as a result of an additional man to the men, calculate the marginal product.

Solution

MP      =          (3,080 – 3,000)

                                 (61 – 60)

               =          80

                            1

   Mp       =          80 tonnes

 total product, average product and marginal product can be calculated using

 total Product, Average Product and Marginal Product.

No. of workersTotal Product (kg)Average Product (kg)Marginal Product (kg)
1 2 3 4 5 6 74 12 24 40 45 48 424 6 8 10 9 8 6– 8 12 16 5 3 -6

           

RELATIONSHIP BETWEEN TOTAL PRODUCT, AVERAGE PRODUCT AND MARGINAL PRODUCT

The relationship between total produce average product and marginal product can best be demonstrated by a graph (Fig. 22.2 k. TP. AP and MP rise initially. TP rises sharply and curves at a maximum when MP is zero TP declines after MP = O and MP assumes negative value.

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