Marginal Product Formula

The following formula is used to calculate the marginal product using the change in input and change in output of a product.

marginal product formula

What is a marginal product?

Marginal product describes the relationship between the change in output with a related change in input of a produced good or service.

In other words, it describes how changing an input will change the output and presents that as a ratio to use in further formulas and analysis.

Example Problem

The following is a step by step guide to calculate a marginal product ratio.

  1. Determine the inputs and outputs to be analyzed. For this example, we are going to say the input is the quantity of raw materials and the output is quantity of goods produced.
  2. Next, determine the change in the input. After making a business decision, we decide to increase the raw material input by 50%.
  3. Next, determine the change in output. After analyzing further, it’s found the output changes by an equal 50%.
  4. Finally, determine the marginal product ratio. So, .50/.50 = 1. The marginal product is 1 which means there’s a direct 1:1 relationship between the input and output in this example.

Related Calculators

Related Terms

marginal product formula
marginal cost formula
marginal rate of substitution formula
marginal product of capital formula
calculate marginal product
marginal rate of technical substitution formula
marginal rate of transformation formula
marginal opportunity cost formula
marginal analysis formula
marginal cost formula economics
formula for contribution per unit
marginal cost of production formula
marginal cost formula example
marginal factor cost formula
law of diminishing marginal utility formula
formula for marginal rate of substitution
marginal price formula
marginal rate of return formula
marginal return formula
marginal formula
marginal cost per unit formula
marginal value product formula
marginal value formula
marginal cost pricing formula
mc formula economics
marginal resource cost formula
law of diminishing returns formula
marginal output formula
marginal variable cost formula
formula of marginal rate of substitution
marginal product formula economics
diminishing return formula
formula marginal utility
formula cost marginal
calculate marginal product of capital
formula for marginal rate of transformation
formula for calculating marginal utility
calculate the marginal product
calculate marginal cost per unit
marginal benefit and marginal cost formula
equimarginal principle formula