Question

How does the marginal product of an input change as less of that input is used?

Answer 1

Marginal Product = Change in Output Change in Input = Q x₁

The Marginal Product can be described as the additional output produced as a result of employing an additional unit of the variable factors of Input. For Example - Change in output when there is a change in the number of labor's employed.

As we see mathematically also Marginal product is directly proportional to the Change in Input. Whenever there is a variable change in the level of Input the Out-Put will increase in multiples as a result.

The Input that a firm Uses in production process are called factors of production. The two factors of production that are widely considered are Capital and Labor.

The Production Function with respect to these Inputs -

Capital = K and Labor = L Firm's Output = F

P = F( K,L)

Marginal Product of Capital = F K

Marginal Product of Labor = F L

Suppose Capital Is fixed at ₂. With ₂ amount of Capital (K) and according to total product curve x₁ Units of labor (L) produce 20 units of output and (X₁ - 1) Units of Capital (K) produce 15 Units of the output. We can say that the Marginal Product of the X₁th Unit of Labor is

MP₁ = f( X₁; ₂) - f( X₁ -1;₂)

= (TP at X₁ Units) - (TP at X₁ -1 Unit)

= (20 - 15) Units of output.

= 5 Units of Output.

Since inputs can't take negative values, Marginal Product is undefined at zero level of Input employed. Marginal Products are additions to total product.

The Law of Diminishing Marginal Product is based on the fact that if we keep increasing the employment of an input, with other inputs constant, eventually at certain point will be reached after which the resulting addition to an output will start falling. The concept is also known as Law of variable Proportions.

The reason behind the law of diminishing Marginal product is we hold one factor input fixed and keep increasing the other, the factors proportion change. Initially we increase the amount of variable input, the factor proportions become more suitable for the production and Marginal product Increases. But after a certain level of employment the production process becomes to crowded the factor proportions become less suitable for production resulting into fall in the Level of Input required for production.

Because of the same concept Marginal product is more of an input change rather less of Input used.