1. What is Marginal Product?

Definition: Marginal Product (MP) measures the change in output resulting from employing one more unit of labor while keeping other inputs constant.

Purpose: It helps businesses understand the productivity of additional labor and make optimal hiring decisions.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( MP \) — Marginal Product (units per worker)
• \( \Delta Q \) — Change in output (units)
• \( \Delta L \) — Change in labor (units)

Explanation: The change in output is divided by the change in labor to determine how much additional output each new worker produces.

3. Importance of Marginal Product

Details: Understanding MP helps businesses determine:

• Optimal workforce size
• When diminishing returns begin
• Labor productivity trends

4. Using the Calculator

Tips:

• Enter the change in output (ΔQ) in units
• Enter the change in labor (ΔL) in worker units
• ΔL must be greater than 0

5. Frequently Asked Questions (FAQ)

Q1: What does a high marginal product indicate?
A: A high MP suggests that additional workers are significantly increasing output, indicating efficient labor utilization.

Q2: What is diminishing marginal product?
A: When MP decreases as more labor is added, indicating each additional worker contributes less than the previous one.

Q3: How is this different from average product?
A: Marginal Product measures the change from adding one worker, while Average Product is total output divided by total workers.

Q4: What units should I use?
A: Keep units consistent - typically output in physical units (items, kg) and labor in worker-hours or employee count.

Q5: When should I stop hiring more workers?
A: When marginal product begins to decline significantly (diminishing returns) or when MP equals the wage cost per worker.