Definition of Marginal Product

Marginal product refers to the additional output produced when one more unit of input is added, while holding all other inputs constant. It is the change in total output resulting from a one-unit increase in the quantity of a single input, with all other inputs held constant.

Mathematical Formula for Marginal Product

Marginal product can be mathematically expressed as follows:

Marginal Product = Change in Total Product / Change in Input

Or

MP = ΔTP / ΔI

Where:
MP = Marginal Product
ΔTP = Change in Total Product
ΔI = Change in Input

Interpretation of Marginal Product

Marginal product is the slope of the Total Product curve. This means that it measures the rate of change in total product resulting from a one-unit increase in the quantity of a single input. The interpretation of the slope of a curve is the same as the interpretation of the marginal product.

Relationship between Marginal Product and Total Product

Marginal product and total product are related because marginal product is simply the change in total product resulting from a one-unit increase in the quantity of a single input. The marginal product curve intersects the total product curve at its maximum point, which is the point of diminishing marginal returns.

Importance of Marginal Product

Marginal product is important because it helps firms to determine the optimal level of input usage. By analyzing the marginal product of each input, firms can determine the point at which the marginal cost of an input equals its marginal product, which is the point of profit maximization.