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3 Tutorials that teach Revenue Product: Total, Marginal and Average
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Revenue Product: Total, Marginal and Average

Revenue Product: Total, Marginal and Average

Author: Justin Tapp
Description:

This lesson will explain Product: Total, Marginal, Average, and (Marginal) Revenue

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Tutorial
Terms to Know
Average Product

Total output divided by quantity of inputs. Should be the average product of labor, or average product of capital.

Diminishing Marginal Product

The marginal product of capital/labor will begin to fall at some point, holding all else constant.

Marginal Product

The output produced when we add one additional unit of input.

Marginal Product of Capital

Additional output generated by adding one more unit of capital.

Marginal Product of Labor

Additional output generated by adding one more unit of labor.

Marginal Revenue Product

Additional sales revenue received from employing another unit of labor/capital.

Total Product

Quantity of goods/services produced.

Formulas to Know
Average Product

A P space equals space T o t a l space O u t p u t space divided by Q u a n t i t y space o f space I n p u t s

Marginal Revenue Product

M R P space equals space M a r g i n a l space P r o d u c t space X space P r i c e space o f space G o o d