How is marginal product defined?

Marginal product is defined as the change in output that results from employing an additional unit of a resource, such as labor, while keeping other inputs constant. This concept is crucial in production theory, as it helps to understand how varying the quantity of one input affects overall production.

When a firm adds one more worker, for instance, the marginal product measures how much more output that worker can produce, highlighting the relationship between input and output. This term is essential for analyzing productivity and efficiency in production processes. It allows firms to determine whether hiring more workers is beneficial or if diminishing returns might set in, where each additional worker contributes less to output than the previous one.

In contrast, total output refers to the overall quantity produced without linking it to the addition of specific units of labor, and total cost relates to expenses incurred in production, not output. The rate of change of total cost is more associated with cost analysis rather than output production. Thus, the definition focusing specifically on the increase in output from an additional unit of labor aligns perfectly with the concept of marginal product.