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Class 11 Micro Economics Notes · CBSE

Concepts of Product (TP, AP, MP)

Concepts of Product (TP, AP, MP) — understanding the three ways to measure output: Total Product, Average Product, and Marginal Product. CBSE Class 11 Microeconomics notes with formulas and calculators.

Last updated: 25 Aug 2026

Notes

Concepts of Product (TP, AP, MP)

Class 11 Microeconomics — Total Product, Average Product, and Marginal Product

Total Product (TP)

Total Product (TP)
Total product refers to the total quantity of goods produced by a firm during a given period of time with a given number of inputs.
Example: If 10 laborers produce 60 kg of rice, then the total product is 60 kg.

Key Takeaways

  • In the short run, a firm can expand TP by increasing only the variable factors.
  • In the long run, TP can be raised by increasing both fixed and variable factors.
  • Total Product is also known as Total Physical Product (TPP) or Total Return or Total Output.

Average Product (AP)

Average Product (AP)
Average product refers to output per unit of variable input.

Average Product

AP=TPnAP = \frac{TP}{n}

Where TP = Total Product, n = Units of Variable Factor

TP from AP

TP=AP×nTP = AP \times n

Worked Example

If total product (TP) is 60 kg of rice, produced by 10 laborers (variable input), then the average product will be 60 / 10 = 6 kg per laborer.

AP Calculator

60
10

Average Product

6.00

60 / 10 = 6.00

Average Product is also known as Average Physical Product (APP) or Average Return.

Marginal Product (MP)

Marginal Product (MP)
Marginal Product refers to the addition to total product when one more unit of variable factor is employed. It measures extra output per extra unit of input holding all other inputs fixed.

Marginal Product

MPn=TPn−TPn−1MP_n = TP_n - TP_{n-1}

Where MPn = Marginal product of nth unit of variable factor

TPn = Total product of n units of variable factor

TPn-1 = Total product of (n-1) units of variable factor

Solved Example

Problem

If 10 laborers make 60 kg of rice and 11 laborers make 67 kg of rice, find the MP of the 11th laborer.

Solution

MP₁₁ = TP₁₁ − TP₁₀ = 67 − 60 = 7 kg

When the change in variable factor is more than 1 unit:

MP (when change > 1 unit)

MP=ΔTPΔnMP = \frac{\Delta TP}{\Delta n}

Example

If 2 laborers produce 60 units and 5 laborers produce 90 units, then MP = (90 − 60) / (5 − 2) = 30 / 3 = 10 units.

TP is Summation of MP: TPn = MP₁ + MP₂ + MP₃ + ... + MPn or TP = Σ MP

Marginal Product is also known as Marginal Physical Product (MPP) or Marginal Return.

Formula Summary

FormulaExpressionAlso Known As
Total ProductTP = Units of VF × AP = Σ MPTPP, Total Return, Total Output
Average ProductAP = TP / Units of VFAPP, Average Return
Marginal ProductMPₙ = TPₙ − TPₙ₋₁MPP, Marginal Return