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How do we calculate marginal product?

Marginal product is additional output produced by change in one unit of input. The marginalproduct can be calculated by dividing change in total product or output by change in input.

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Chapter 7

Production, Costs and Industry Structure

How Markets Work

The Economics of Labor Markets

Firm Behavior and the Organization of Industry

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So what is marginal product? Whenever we talk about marginal, we're talking about one additional unit of something. This is, um, one plus unit of, uh, ex Some something, and product is basically, um, the output of some some input. So when we're talking about marginal product, we're usually talking about how much more product, how much more of something that you produce is one additional unit of capital or labor going to provide you? So the way to calculate that is, if you have a, um, a column for the number of workers that you have will denote that buy labor and the amount of product you have If you have 1234 workers. And for each, um, worker for one worker, you get to, um, or you get for, ah, pieces of clothing for two workers. You get seven pieces of clothing for three workers, you get nine pieces of clothing and for four workers you get 10 pieces of clothing. The marginal product of the fourth worker the marginal product of the fourth worker would be equal to the product of the fourth worker minus. I'm going to repeat are the product of the fourth worker minus the product of the third Worker. That's how much product that this fourth worker provides, so that would be equal to nine or 10 minus nine, which is equal to one. So the marginal product of four workers or the fourth worker is going to be equal to one now. Similarly, it will be the same thing for capital, capital and product. So if I have ah for machines for my first machine, I can have four pieces of clothing for my second machine. I can have seven pieces of clothing. This is just hypothetical. For my third, um, machine. I have nine pieces of clothing and for my fourth machine, I have it produced 10 pieces of clothing, the marginal product of the third machine. In this case, the marginal product of the third machine is equal to the product of the third machine, minus the product, um, produced by having two machines. So this is equal to, um nine, and this is equal to seven, so nine minus seven is equal to two. So the marginal product, the product you get as from hiring one additional unit of capital is equal to two. When you're talking about your third unit of capital

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