Marginal product (MP) is the change in total product resulting from the
use of one additional unit of the variable factor. [ 13 ] Recalling that the
Greek letter Δ (delta) means “the change in,” marginal product is given by
Computed values of marginal product are shown in column 4 of the table
in Figure 7-1. The values in this column are placed between the other
rows of the table to stress that the concept refers to the change in output
caused by the change in quantity of the variable factor. For example, the
increase in labour from 3 to 4 units increases output from 13 to
22. Thus, the MP equals 9, and it is recorded between 3 and 4
units of labour. Note that MP in the table first rises and then falls as the
amount of labour increases. The level of labour input at which marginal
product reaches a maximum (between 6 and 7 units of labour in this
example) is called the point of diminishing marginal productivity.
Part (ii) of Figure 7-1 plots the AP and MP curves from the table.
Although three different curves are shown in Figure 7-1 , they are all
aspects of the same single relationship described by the production
function. As we vary the quantity of labour, with capital being fixed,
output changes. Sometimes it is interesting to look at total product,
sometimes at average product, and sometimes at the marginal product.
We will see later in this chapter that understanding firms’ costs requires
understanding how total, average, and marginal products are related to
MP = ΔΔTLP(ΔL= 1 )
(ΔTP= 9 )