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What is average productivity? What is marginal productivity?

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What is average productivity? What is marginal productivity? Explain the relationship between average and marginal productivity. What would happen to average and marginal productivity if a technological innovation were introduced to the production process? How does the law of diminishing returns affect marginal and average productivity?

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Solution Summary

This solution gives detailed answers to the following questions, with examples:

What is average productivity?
What is marginal productivity?
Explain the relationship between average and marginal productivity.
What would happen to average and marginal productivity if a technological innovation were introduced to the production process?
How does the law of diminishing returns affect marginal and average productivity?

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>What is average productivity?

The average productivity of a particular input, such as labor, is the total output of the firm divided by the total amount of that input, such as the number of workers.

>What is marginal productivity?

The change in output that results from adding one more unit of an input, such as an additional worker.

>Explain the relationship ...

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