How is TPP derived from MPPa)Cumulative additionb)Cumulative divisionc...
Marginal physical product (MPP) is the change in the level of output due to a change in the level of variable input; restated, the MPP is the change in TPP for each unit of change in quantity of variable input.
Total physical product (TPP) -- Quantity of output that is produced from a firm's fixed inputs and a specified level of variable inputs.
So, by adding all the MPP, TPP can be derived.
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How is TPP derived from MPPa)Cumulative additionb)Cumulative divisionc...
The correct answer is option 'A', which states that TPP (Total Physical Product) is derived from MPP (Marginal Physical Product) through cumulative addition. Let's understand this in detail.
Understanding TPP and MPP:
- TPP (Total Physical Product) refers to the total output or quantity of goods produced by a specific number of inputs, such as labor or capital.
- MPP (Marginal Physical Product) represents the additional output produced by adding one more unit of input while keeping other inputs constant.
Deriving TPP from MPP:
To derive TPP from MPP, we need to understand the relationship between the two. MPP is the rate of change of TPP with respect to the input quantity. In other words, MPP tells us how much additional output is produced when one additional unit of input is added.
Cumulative Addition:
Cumulative addition involves adding up the values of MPP for each unit of input to determine the TPP.
Here's how it works:
1. Initially, when no input is added, MPP is zero because there is no additional output produced.
2. As we start adding one unit of input, MPP will be positive and will indicate the additional output produced by that unit.
3. For the second unit of input, MPP will again indicate the additional output produced by that unit.
4. We continue this process for each additional unit of input, and for each unit, we calculate the MPP.
5. To find the TPP, we add up all the MPP values for each unit of input. This gives us the total output produced by all the units of input combined.
Example:
Let's consider an example to illustrate this concept. Suppose we have a production process where labor is the input and the output is the number of units produced.
Number of labor units: 0 1 2 3 4
MPP (Marginal Physical Product): 0 10 8 6 4
TPP (Total Physical Product): 0 10 18 24 28
In this example, the MPP values are calculated for each additional unit of labor, and the TPP is derived by adding up all the MPP values.
Conclusion:
In summary, TPP is derived from MPP through cumulative addition. By adding up the MPP values for each unit of input, we can determine the total output produced. This understanding of the relationship between TPP and MPP is crucial in analyzing production processes and making informed decisions regarding resource allocation and efficiency.
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