Question

Given a short-run production function, Define its average product and marginal product.

Answer 1

A production function exhibits a functional relationship between the inputs used and output produced by the firm. Generally there are two types of inputs or factors used by the firm:variable factor and fixed factor of production. Production function can be given as Q = f(K, L) where K and L are capital and labor inputs.

Average product is total product divided by quantity of input used. Marginal product is the derivative of the total product with respect to the quantity of input used. In other words it is the ratio of change in total product change in quantity of variable input. Assume that production function is Q = L^2 + 2L + 20

Then, marginal product of labour = 2L + 2. Similarly average product of labour = L + 2 + 20/L.