What is the marginal product of an input?


Marginal product is the rate at which total product increases or we can define the marginal product as the increase in the total product with every additional unit of the variable factor.

For Example – If a firm produces 10 pieces of shirt by employing 1 labour and 15 pieces of shirt by employing 2 labours, then the marginal product will be 5.


The mathematical expression for Marginal Product (MP) is –


MPn= TPn – TPn-1


Where,


MPn – Marginal Product at ‘n’ units of variable factor


TPn – Total Product at ‘n’ units of variable factor


TPn-1 – Total Product at ‘n-1’ units of variable factor


Let's go through the following product schedule to understand it –



Number of Men



Total Product (units)



Marginal Product



1


2


3


4


5


6


7


8



30


80


120


150


170


170


150


120



30


50


40


30


20


0


-20


-30




Now, see that with every increasing unit of labour the marginal product is increasing initially but when the total product is constant the marginal product is zero and then after it is negative. This means once the maximum capacity of firm is achieved then the marginal product becomes negative for every additional level of input.


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