Relation Between TP, AP and MP and their Curves - Economics

# Relation Between TP, AP and MP and their Curves - Economics Video Lecture - Economics Class 11 - Commerce

## FAQs on Relation Between TP, AP and MP and their Curves - Economics Video Lecture - Economics Class 11 - Commerce

 1. What is the relationship between Total Product (TP), Average Product (AP), and Marginal Product (MP)? Ans. Total Product (TP) represents the total amount of output produced by a firm using a given quantity of inputs. Average Product (AP) is calculated by dividing the total product by the quantity of inputs used, and it represents the average output per unit of input. Marginal Product (MP) is the additional output that is produced by using one additional unit of input. The relationship between these three concepts is that the marginal product affects the average product. When the marginal product is greater than the average product, the average product increases. Conversely, when the marginal product is less than the average product, the average product decreases.
 2. How are the TP, AP, and MP curves related? Ans. The TP, AP, and MP curves are interrelated and can be depicted on a graph. The TP curve shows the total product as the quantity of inputs increases. The AP curve shows the average product at each level of input quantity. The MP curve shows the marginal product at each level of input quantity. The AP curve reaches its maximum point where the MP curve intersects it. After this point, as the MP curve declines, the AP curve starts to decline as well.
 3. What does it mean when the MP curve intersects the AP curve? Ans. When the Marginal Product (MP) curve intersects the Average Product (AP) curve, it signifies that the average product is at its maximum point. At this point, the additional input is still increasing the total output, but it is no longer increasing the average output per unit of input. Beyond this point, the marginal product starts to decline, leading to a decrease in the average product.
 4. How does the TP curve relate to the MP curve? Ans. The Total Product (TP) curve is derived from the Marginal Product (MP) curve. The TP curve shows the total output as the quantity of inputs increases. It is the sum of all the marginal products at each level of input quantity. The MP curve, on the other hand, shows the additional output produced by each additional unit of input. The TP curve increases at a decreasing rate when the MP curve is positive but decreasing. The TP curve reaches its maximum point when the MP curve becomes zero.
 5. What is the significance of the relationship between TP, AP, and MP for firms? Ans. The relationship between TP, AP, and MP is crucial for firms as it helps them understand the efficiency of their production processes. When the marginal product is greater than the average product, it indicates that the firm is operating efficiently and experiencing increasing returns to scale. Conversely, when the marginal product is less than the average product, it suggests that the firm's production process is becoming less efficient, and it may be experiencing diminishing returns to scale. By analyzing these relationships, firms can make informed decisions regarding their input usage and overall production strategies.

## Economics Class 11

197 videos|224 docs|71 tests

## Economics Class 11

197 videos|224 docs|71 tests
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