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How to Calculate Marginal Product in Economics

by Matt McGew, Demand Media

    Marginal product is an economics term used to describe the additional output that is produced by one more unit of an input. In other words, how does the last unit effect the total product. Marginal product is an important concept used to analyze short-run production. You can calculate marginal product by dividing the change in the total product by the change in the variable input.

    Step 1

    Calculate the change in the total product. For example, assume that adding two additional worker increases production by 25 units. Thus, the total change in the product is 25 units.

    Step 2

    Calculate the change in variable input. Continuing with the same example, we added two works, so the change in variable input is 2.

    Step 3

    Divide the change in total product by the change in the variable product. Continuing with the same example, 25 /2 = 12.5. This figure represents the marginal product.

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    About the Author

    Since 1992 Matt McGew has provided content for on and offline businesses and publications. Previous work has appeared in the "Los Angeles Times," Travelocity and "GQ Magazine." McGew specializes in search engine optimization and has a Master of Arts in journalism from New York University.

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