

The shape of the total product curve is used to determine teamwork by using variable inputs with predetermined input. Total Product or TP also represents the total amount of result or output than a firm can produce within a given time and amount of labour. It is essential to know that the amount of work can change with the change in output as well.
This section will help a student understand the relationship between TP and MP and how it affects the production and cost shapes.
Factors Determining Total Product Average Product and Marginal Product
Before understanding the essential functions of production and cost shape, the terms like TP AP MP must be distinguished.
What is Total Product or TP?
Total product is the total amount of output made with a given amount of input during a period. A firm wanting a rise in the total product in the shortest time or short-run can increase its variable factors as fixed factors will remain the same.
It is essential to know that in long-run factors become variable and a firm can increase its total product by increasing its characteristics. These factors gradually become inconsistent, and the concept of total products aids in understanding the marginal product.
What is Marginal Product or MP?
A marginal product can be determined by calculating total product and adding marginal returns. The rise in output per unit and the increase in the input is called a marginal effect. If one takes labour as input for production, then a marginal product can be calculated by using this formula.
MP = Change in output divided by change in the input
TP = ƩMP
What is Average Product or AP?
The average product is the per-unit total of a product with a variable factor which can be taken as labour. The calculation of average production can be done with the formula-
AP = Total Product divided by units of variable factor input
AP= TP/L
It can also be calculated by TP = AP x L
What Is The Relationship Between TP AP and MP?
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In the above diagram, the TP curve rises at an increasing way after which it gradually rises but at a decreasing rate. This gives the S-shaped, which shows a trend continuing till TP reaches max. Here MP is zero after which TP starts to decrease
In the MP curve, there is even a gradual rise which reaches max and then falls. It is essential to know that when MP is maximum at the point, TP starts to rise in a diminishing way. Here MP is negative while TP remains positive even at its fall.
Now the AP curve shows similar characteristics as MP. It starts to increase and reaches max to fall. At this point, AP rises to its highest level. Here AP becomes equal to MP.
Here the relationship between AP and MP as well as TP is seen in inverted U shape.
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FAQs on Product Shapes: Total, Average, and Marginal Explained
1. What are Total Product (TP), Average Product (AP), and Marginal Product (MP) in economics?
These are fundamental concepts in production theory:
- Total Product (TP) refers to the total quantity of output a firm produces with a given amount of inputs over a specific period.
- Average Product (AP) is the output per unit of a variable input (like labour). It measures the average productivity of each unit of that input.
- Marginal Product (MP) is the additional output produced by adding one more unit of a variable input, while keeping all other inputs constant.
2. How do you calculate Total Product (TP), Average Product (AP), and Marginal Product (MP)?
The formulas for calculating these production metrics are:
- Average Product (AP): AP = Total Product (TP) / Units of Variable Input (L). For example, AP = TP / Labour.
- Marginal Product (MP): MP = Change in Total Product (ΔTP) / Change in Variable Input (ΔL).
- Total Product (TP): TP can be found by summing up all the marginal products (TP = ΣMP) or by rearranging the AP formula (TP = AP × L).
3. What are the typical shapes of the Total Product (TP), Average Product (AP), and Marginal Product (MP) curves?
The product curves have distinct, interrelated shapes:
- The Total Product (TP) curve is typically an inverted 'S' shape. It initially rises at an increasing rate, then rises at a diminishing rate, reaches a maximum, and finally begins to decline.
- The Average Product (AP) curve and the Marginal Product (MP) curve are both inverted 'U' shapes. Both curves first rise, reach a maximum point, and then fall. The MP curve generally rises faster and falls faster than the AP curve.
4. What is the relationship between the Total Product (TP) and Marginal Product (MP) curves?
The relationship between TP and MP is a direct reflection of production stages:
- When MP is positive and rising, TP increases at an increasing rate.
- When MP is positive but falling, TP increases, but at a diminishing rate.
- When MP is zero, TP reaches its maximum point.
- When MP is negative, TP starts to fall.
5. How are the Average Product (AP) and Marginal Product (MP) curves related?
The relationship between AP and MP determines the average productivity:
- When MP is greater than AP (MP > AP), the AP curve is rising. This means the last worker added was more productive than the average, pulling the average up.
- When MP is less than AP (MP < AP), the AP curve is falling. The last worker added was less productive, pulling the average down.
- When MP equals AP (MP = AP), the AP curve is at its maximum point. The MP curve intersects the AP curve at this maximum point from above.
6. Why do the product curves (TP, AP, MP) have their characteristic shapes?
The shapes of the product curves are explained by the Law of Variable Proportions, which operates in the short run. This law describes three stages of production:
- Stage 1 (Increasing Returns): Initially, as more variable inputs (e.g., labour) are added to fixed inputs (e.g., machinery), there is better utilisation of the fixed factor and increased specialisation. This causes MP to rise, and TP increases at an increasing rate.
- Stage 2 (Diminishing Returns): After a certain point, the fixed factor becomes a constraint. Adding more variable inputs still increases total output, but less efficiently. This causes MP to fall, and TP increases at a diminishing rate.
- Stage 3 (Negative Returns): Eventually, there are too many variable inputs for the fixed input, leading to overcrowding and inefficiency. This causes MP to become negative, and TP starts to decline.
7. Can Marginal Product (MP) be zero or negative while Total Product (TP) is still positive? Explain why.
Yes, this is a key concept. Total Product (TP) represents the entire output, which will remain positive as long as the firm is producing anything. Marginal Product (MP), however, measures only the change from the last unit of input.
- MP is zero when adding one more worker adds nothing to the total output. This happens when TP is at its absolute maximum.
- MP becomes negative when adding one more worker actually causes total output to fall, perhaps due to overcrowding or disorganisation. Even in this case, the total output (TP) is still a large positive number, it's just less than it was before the last worker was added.
8. How does understanding TP, AP, and MP help a business make production decisions?
Understanding these concepts is crucial for a firm to maximise efficiency and profit. A rational producer will always aim to operate in Stage 2 (Diminishing Returns) of production. Operating in Stage 1 is suboptimal because the fixed assets are underutilised, and operating in Stage 3 is irrational because adding more inputs decreases total output. By analysing the AP and MP curves, a firm can identify the 'sweet spot' where productivity is high and determine the optimal number of variable inputs to employ.

















