What is Average Product?
Average product is the total output divided by the number of input units used. It shows how productive each unit of input is on average—whether workers, machines, or land.
Average product (AP) is total output divided by total units of input: AP = Q ÷ L. For example, if 5 workers produce 100 widgets, the average product per worker is 20 widgets.
Step-by-step worked examples
A textile mill employs 4 workers and produces 80 metres of cloth daily. What is the average product?
Total output = 80 metres Number of workers = 4 AP = 80 ÷ 4 = 20 metres per worker
With 6 machines, a factory produces 420 units per week. Calculate average product per machine.
Total output = 420 units Number of machines = 6 AP = 420 ÷ 6 = 70 units per machine
A team of 5 programmers writes 250 lines of code daily. What is AP in lines per programmer?
Total output = 250 lines Number of programmers = 5 AP = 250 ÷ 5 = 50 lines per programmer
Flashcards
Quick quiz
Q1.If 3 workers produce 60 units, what is the average product?
Q2.AP is maximised when…
Q3.If 8 workers produce 160 units, and a 9th worker adds 15 units, what is the new AP?
Q4.When MP > AP, what happens to AP?
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Common mistakes
Confusing average product with total output. — Correct: AP is per-unit—total output ÷ number of units.
AP and MP always move together. — Correct: MP is more volatile; AP is smoother and lags behind MP.
AP can never rise if MP is falling. — Correct: If MP is still above AP, AP will keep rising.
Maximum AP is where MP peaks. — Correct: Maximum AP is where MP = AP, not where MP is highest.
FAQ
What is average product?
Total output divided by the number of input units—how productive each unit is on average.
How is average product calculated?
AP = Q ÷ L, where Q is total output and L is the number of input units (workers, machines, etc.).
What is the relationship between AP and MP?
When MP is above AP, AP is rising. When MP falls below AP, AP is falling. AP peaks where MP = AP.
When does average product start to decline?
When the marginal product of each new unit falls below the current average.