By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to
A. average product B. total product C. average variable cost D. total cost
Correct Answer: B
Explanation
Total product is the overall quantity of output that a firm produces, usually specified in relation to a variable input. Total product is the starting point for the analysis of short-run production. It indicates how much output a firm can produce according to the law of diminishing marginal returns. Marginal Product (MP) = Change in Total Product / Change in Variable Factor Total Product (TP) = AP X Variable Factor
