Average Product Essay

AVERAGE PRODUCT
Definition:
Average product is defined as the average output (or products) produced by each input (factors of production like labour and land). It's a way for companies to measure total output produced with a particular combination of variable inputs. In our example, it's the average number of tents produced by each worker. An economist can calculate average production when he/she calculates the company's total output of tents per each working employee it requires to make them.

Method in calculating Average Product
Average product is the unit production of a particular company. Theoretically, it is calculated by using the formula: total product divided by the input of the variable labour. According to the analysis of short

The curve will demonstrate the unit output on each level of the variable input. In the analysis of short term running production, the average product curve is used as well as the total product curve and marginal product curve.
A graph is use to express the relationship for the average product when there is an increase in the number of input. Below is an example of a typical average physical product curve (APP). The average physical product curve can be produced by drawing a vector from the starting point to different points on the total product curve and plotting the slopes of these vectors. It is known that when the average physical product is falling, the marginal physical product must be less than the average because the marginal product drives changes in the average product. Simultaneously, when the average physical product is increasing, it can be concluded that it is the result of the marginal physical product being greater than the average. The marginal physical product curve will cross at the maximum point on the average physical product

The denominator is always one because the formula calculates each unit of increase in labour. Companies can calculate the marginal product by subtracting the previous quantity of items produced from the current quantity of items produced. For example, in more than 30 days, Bob produces 90 pairs of jeans. When he works with a partner, Ron, the output of the pair increases to 190 pairs of jeans. Bob’s productivity is 90 and the marginal productivity of adding a second person is