CIA 4U1 Key Chapter 4: Costs of Production CHAPTER 4 Page 95 a ...

CIA 4U1
Key Chapter 4: Costs of Production
Total Product Curve
350
300
Pots Produced per Week
250
200
150
100
TP
50
0
0 1 2 3 4 5 6
Number of Workers Employed per Week
Marginal and Average Product Curves
200
150
Pots Produced per Week
100
50
AP
0
0 1 2 3 4 5 6
-50
MP
-100
Number of Workers Employed per Week
g. Marginal product reaches its peak where diminishing marginal returns set in. Total
product rises less rapidly and finally becomes negatively sloped once diminishing
marginal returns set in. Average product reaches its maximum where it equals marginal
product. Then, because of diminishing marginal returns, with marginal product falling
and below average product, average product declines.