Question

Calculate marginal production and average production from the following data:

Hint:

Remember, "Average" is the total divided by the number of units. "Marginal" means the additional output from one more unit of input. The marginal value is the change between steps.

Answer 1

The calculations for Marginal Production (MP) and Average Production (AP) are as follows:

Formulas:

Average Production (AP) = Total Production / Units of Labour

Marginal Production (MP) = Change in Total Production / Change in Units of Labour

Calculations:

For 1 unit of Labour:

AP = \( \frac{20}{1} = 20 \)

MP = \( \frac{20 - 0}{1 - 0} = 20 \)

For 2 units of Labour:

AP = \( \frac{36}{2} = 18 \)

MP = \( \frac{36 - 20}{2 - 1} = 16 \)

For 3 units of Labour:

AP = \( \frac{48}{3} = 16 \)

MP = \( \frac{48 - 36}{3 - 2} = 12 \)

Result Table:

Units of Labour	Total Production	Average Production (AP)	Marginal Production (MP)
1	20	20	20
2	36	18	16
3	48	16	12