Total product is all the output, average product is output per worker, and marginal product is the extra output from one more worker. Each has its own formula and its own meaning.
This lesson sits inside production and costs. It works in the short run, so read short run and long run first if the term is new.
Which formula goes with which quantity?
| Quantity | Formula | Question it answers |
|---|---|---|
| Total product (TP) | Read from the table | How much was made in all? |
| Average product (AP) | TP ÷ number of workers | How much per worker? |
| Marginal product (MP) | TP now − TP before | What did the last worker add? |
Marginal always compares two neighbouring rows. Average divides one row by its own worker count.
Worked example: a fictional tailoring shop
The shop has a fixed number of sewing machines and adds workers one at a time.
| Workers | TP (shirts) | MP | AP |
|---|---|---|---|
| 1 | 10 | 10 | 10.0 |
| 2 | 24 | 14 | 12.0 |
| 3 | 42 | 18 | 14.0 |
| 4 | 58 | 16 | 14.5 |
| 5 | 68 | 10 | 13.6 |
| 6 | 72 | 4 | 12.0 |
Sample working: MP of worker 4 = 58 − 42 = 16. AP with 5 workers = 68 ÷ 5 = 13.6. Every other row follows the same two steps.
Notice that MP peaks at worker 3 (18), and AP peaks later at worker 4 (14.5). Total product still rises at worker 6, because MP is still positive.
How does marginal product pull the average?
Compare MP with the AP of the row before. At worker 4, MP is 16, which is above the previous AP of 14.0, so AP rises to 14.5.
At worker 5, MP is 10, which is below the previous AP of 14.5, so AP falls to 13.6.
So the rule is: if MP is above AP, AP rises; if MP is below AP, AP falls. A new worker who adds less than the current average drags the average down, just as a low test score drags down a class average.
The mistake that costs marks
The common slip is to divide the extra output by the total workers instead of comparing two totals. A student computes the MP of worker 4 as 58 ÷ 4 = 14.5, which is the average, not the marginal.
The fix is to check the word “extra” or “additional” in the question. It signals marginal, so subtract the previous total.
Check yourself
A fictional noodle stall adds helpers. Total output is 12, 28, 48 and 60 bowls with 1, 2, 3 and 4 helpers. Find the MP of the third helper and the AP with four helpers, and say whether AP rose or fell at the fourth helper.
Answer
MP of the third helper = 48 − 28 = 20 bowls.
AP with four helpers = 60 ÷ 4 = 15 bowls.
AP with three helpers was 48 ÷ 3 = 16. MP of the fourth helper = 60 − 48 = 12, which is below 16, so AP fell to 15.
What to study next
Continue with explaining productivity, which uses average product to judge efficiency. For a deeper drill on cost columns, try separating total, average and marginal quantities.
If you want a teacher to watch you calculate these from tables, see online one-to-one Economics tuition.