The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
| 0 | 0 |
| 1 | 15 |
| 2 | 35 |
| 3 | 50 |
| 4 | 40 |
| 5 | 48 |
Step 1: Calculate Average Product (AP_L)
Average Product is defined as the output per unit of variable input. We calculate it as: AP_L = TP_L / L
Calculations:
- L=1: AP_L = 15/1 = 15
- L=2: AP_L = 35/2 = 17.5
- L=3: AP_L = 50/3 = 16.67
- L=4: AP_L = 40/4 = 10
- L=5: AP_L = 48/5 = 9.6
At L=0, AP_L is undefined (division by zero).
Step 2: Calculate Marginal Product (MP_L)
Marginal Product is defined as the change in output per unit of change in the input. We calculate it as: MP_L = TP_L - TP_(L-1)
Calculations:
- L=1: MP_L = 15 - 0 = 15
- L=2: MP_L = 35 - 15 = 20
- L=3: MP_L = 50 - 35 = 15
- L=4: MP_L = 40 - 50 = -10
- L=5: MP_L = 48 - 40 = 8
At L=0, MP_L is undefined (no previous TP value).
Step 3: Final Schedule
| L | TP_L | AP_L | MP_L |
|---|---|---|---|
| 0 | 0 | - | - |
| 1 | 15 | 15 | 15 |
| 2 | 35 | 17.5 | 20 |
| 3 | 50 | 16.67 | 15 |
| 4 | 40 | 10 | -10 |
| 5 | 48 | 9.6 | 8 |
Explanation
Average Product (AP_L) is calculated by dividing Total Product (TP_L) by the quantity of labour (L). Marginal Product (MP_L) is calculated by finding the difference between consecutive Total Product values. At L=0, both AP_L and MP_L are undefined because division by zero is not possible and there is no previous TP value.
Solution Steps
Step 1: Calculate Average Product (AP_L) using the formula AP_L = TP_L / L for each level of labour.
Step 2: Calculate Marginal Product (MP_L) using the formula MP_L = TP_L - TP_(L-1) for each level of labour.
Step 3: Compile the results into a table showing L, TP_L, AP_L, and MP_L.