Marginal Product vs. Average Product: What’s the Difference?

The main difference between Marginal Product and Average Product is that Marginal Product shows how much one more worker helps, while Average Product shows how much each worker helps overall.

Before we move to more differences, let’s first understand Marginal Product and Average Product:

  • Marginal Product: Marginal Product: Marginal product tells us how much more output is made by using one more unit of input. It shows the change in production when we increase input by a small amount.
  • Average Product: Average Product: Average product is the total output divided by the number of inputs used. It gives an idea of how much each input contributes on average.

Now, let’s get to Marginal Product vs Average Product:

Major differences between Marginal Product and Average Product

Marginal Product Average Product
Marginal product measures the change in output resulting from one additional unit of input. Average product calculates the total output produced per unit of input.
Marginal product indicates the efficiency of the last unit of input added. Average product gives an overall productivity level based on total input.
Marginal product can be diminishing, increasing, or negative, depending on the stage of production. Average product tends to diminish after reaching a peak.
Marginal product directly influences total product. Average product indirectly impacts total product by reflecting the efficiency across all units of input.
Marginal product helps in determining the optimal level of input required for maximum output. Average product aids in assessing the overall productivity of input resources.

So, these are the main differences between the entities.

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