marginal product curve This is a topic that many people are looking for. unusual-travel-destinations.com is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, unusual-travel-destinations.com would like to introduce to you Introduction to Production Introduction (Average Product, Marginal Product, Total Product) . Following along are instructions in the video below:
“This tutorial. I m going to discuss production theory. And this is the first video video of a three part playlist this tutorial. I don t use any numbers or i just introduced you to the ideas of total product marginal product and average product and their relationships.
It turns out quantity produced is equal to some function of labor and capital and in your textbooks. You ll see q is equal to functional f. Means function of l. And capital is denoted by k.
So quantity is a function of labor and capital and sometimes since capital is fixed. That s what that little line over the top means. It s fixed. It s written as quantity is equal to quantity is equal to a function of labor along the x axis.
I m going to graph units of labor. And that can be number of workers or hours along the y axis or the vertical axis. I have units of output or quantity. As labor is added.
I produce a quantity l1 is my labor and q1 is the quantity if i add more labor. I produce more now l2 is my labor and q2 is my quantity. But if i keep adding labor a point comes in time well actually produce less so i have l3 and q3. And you ll learn why that is in this video.
And the subsequent two videos and this is the total product curve. The brown line is a total product curve again holding capital fixed or constant. Now if i take that same unit of labor line horizontal line. I pull it down like that that s units of labor and on the y axis.
I have units of output per worker. Now i can plot average product now average product is the amount of labor in this case. L1 divided into the amount of quantity is average product in other words quantity divided by labor is equal to average product. Your professor and your textbooks.
Probably use the notation apl to represent average product of labor. All the shoes average product. Now if i pull labor straight down. Then average product is q1 divided by l1 at that point in time marginal products.
A little different let me draw that curve in the blue line is marginal product of labor. Let me add labor and quantity. At point. 1.
And also labor and quantity at point 2 l. 2. And q. 2.
If i add some labor. How much does quantity go up or change by the way that little triangle that little delta means change in so marginal product is the change in quantity divided by the change. In labor. Which is equal to q.
2. Minus. Q. 1.
L2. Minus l1. This is all equal to marginal product. Also it may be written in your textbooks.
As npl. Which means marginal product of labor. So it looks something like this you may recognize this as hopefully maybe it recognizes the rise and this is the run. So we have rise over run.
Which is equal to the slope. So marginal product is equal to the slope of the total product curve at any particular point in this case. We lit. The change in labor be very small in fact the change in labor is 1 labor unit.
So in essence. We want to know is if labor goes up one unit. How much does quantity produced change. It s a slope of the total product.
Curve. Marginal product of labor is a slope of the total product curve. A tangent line at any point on that total product curve is the slope or the rate of change. And that s also a marginal productivity of labour at every point.
And some points are more interesting to others for example. This is where marginal productivity of labour is zero and then it goes negative. If i draw a tangent line and just touch the total product curve like that and i draw a straight line down. What that shows me is at that point average product is equal to marginal product.
Another point of interest is when that tangent line is flat. And that means the rate of change is zero or the slope is zero. So it crosses the horizontal axis right at the zero point. There that value there is zero.
And anything beyond this point the slope is negative so now i have three distinct regions. Our stages. I have stage 1 which is the first part their stage 2 and stage 3 stage. 1 is increasing average product.
We re marginal product is greater than average product stage. 2 is decreasing average product. But i still have a positive marginal product stage. 3 is a decreasing total product and a negative marginal product and with negative marginal product total product is actually falling adding more labour causes total product to fall one last idea is diminishing marginal returns.
And that s from that point forward were marginal product of labor. The slope is actually negative or decreasing again total product is actually. I should say quantity is a function of labor and capital where i ve fixed capital and so it is quantity as a function of labor. Often in your textbooks.
You ll see this labeled as tp or total product tp l. Actually you ll see ap. Representing average product. Apl and mp l.
Representing marginal product of labor up next. I m going to do the same thing. But i will use numbers and i ll talk about total product average product and marginal product of labor and all use numbers. ” .
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Visual explanation of Production Theory, Total Product, Average Product, and Marginal Product of Labor used in economics classes. This is the first of three videos on the play list.r
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Production Theory, Average Product, Marginal Product, Total Product, AP, MP, TP, Labor, Microeconomics, GCSE, revision. Capital, Quantity produced