ECONOMICS

Detailed explanation-1: -The additional output produced as a result of employing an additional unit of the variable factor input is called the Marginal Product. Thus, we can say that marginal product is the addition to Total Product when an extra factor input is used.

Detailed explanation-2: -Answer: A. The change in output when one additional unit of input is used is called the marginal physical product. This is because we are measuring output in physical units. We are not measuring the change in revenue or else it would be the marginal revenue product.

Detailed explanation-3: -The law of diminishing marginal returns states that when an advantage is gained in a factor of production, the marginal productivity will typically diminish as production increases. This means that the cost advantage usually diminishes for each additional unit of output produced.

Detailed explanation-4: -When the marginal product is increasing, the total product increases at an increasing rate. If a business is going to produce, they would not want to produce when marginal product is increasing, since by adding an additional worker the cost per unit of output would be declining.

Detailed explanation-5: -The addition to total cost by producing an additional unit of output by a firm is called marginal cost. Average cost is the total cost of producing a given output divided by that output.