Total Product

total product Total product is the output from a production system. It is synonymous with Q in Equation 7.1.

Whole output from a Total product is the overall output that results from employing a specific quantity of resources in producti┬░n system a given production system. The total product concept is used to investigate the relation between output and variation in only one input in a production function. For example, suppose that Table 7.1 represents a production system in which Y is a capital resource and X represents labor input. If a firm is operating with a given level of capital (say, Y = 2), then the relevant production function for the firm in the short run is represented by the row in Table 7.1 corresponding to that level of fixed capital.2 Operating with two units of capital, output or total product depends on the quantity of labor (X) employed. This total product of X can be read from the Y = 2 row in Table 7.1. It is also shown in column 2 of Table 7.2 and is illustrated graphically in Figure 7.2.

Was this article helpful?

0 0
Your Retirement Planning Guide

Your Retirement Planning Guide

Don't Blame Us If You End Up Enjoying Your Retired Life Like None Of Your Other Retired Friends. Already Freaked-Out About Your Retirement? Not Having Any Idea As To How You Should Be Planning For It? Started To Doubt If Your Later Years Would Really Be As Golden As They Promised? Fret Not Right Guidance Is Just Around The Corner.

Get My Free Ebook

Post a comment