Table of Contents
Definition of Total Product (TP)
In economics, Total product is the output produced by the firm within the given period of time with the given set of inputs. In other words, we define it as the total amount of commodity produced by the combination of all the inputs with a given period of time. It is also known as a total return or total physical product.
Formula to calculate Total Product (TP);
TP = AP × N
where;
TP = Total Product
AP = Average Product
N = No. of inputs employed
Also, we can calculate TP through;
TP= ∑MP
where;
∑ = Summation
MP = Marginal Product
Slope of TP
The slope of the TP refers to the change in the output of a firm associate with a change in the factors of production.
Slope of the curve = ΔQ/ΔN
where,
ΔQ= change in output
ΔN = Change in inputs
Generally, we deal here how the firm behaves when successive inputs are adding continuously in the short-run production where variable factors only changed, others fixed factor remains constant. In other words, it means that if we have to increase the Total product (TP), we should only change the variable inputs. In the short run, TP increases at an increasing rate, then it increases at a decreasing rate, becomes maximum and constant, and finally declines. This all is due to the law of diminishing marginal return.
This are shown through the given table and graph.
Schedule of TP
From the above table, we can see that when a firm increases its variable factor of production i.e. Labor from 1 unit to 2, 3 units.TP increases at an increasing rate. After that when we continue increasing the inputs from 3 units of labor to 6 units, TP increasing at decreasing rate and become maximum and constant. Further, we again increase the units of labor, TP declines.
Let’s discuss it through the graphically representation;
Total Product Curve (TP curve)
TP curve is the locus of a point represent the various quantities of the commodity produced with different level of variable factors, keeping fixed factors constant.
The above figure shows that when a firm initially increases the employment of labor (variable factor of production in the short-run), TP increases at an increasing rate (ie. to A point). After a point, it increases at decreasing rate and becomes maximum and constant. After that, if a firm continuously increases the employment of labor, then TP finally declines.
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