What is marginal product?
Marginal means 'one more'. Marginal product is how much extra output you get when you add one more unit of an input, like one more worker.
Example: 3 workers make 27 sacks. 4 workers make 32 sacks. The fourth worker added 32 − 27 = 5 sacks. So the marginal product of the fourth worker is 5.
In symbols: MP = ΔQ ÷ ΔL. The triangle Δ (delta) means 'change in'.
From counting to the derivative
Counting works when we add whole workers. But many inputs are smooth: water in litres, fertiliser in grams, machine hours. For a smooth formula Q = f(L) we make the step ΔL very, very small. The fraction ΔQ ÷ ΔL then becomes the derivative:
MP = dQ/dL
On the graph this is the slope of the tangent line, the line that just touches the curve at one point.
Useful rule (power rule): the derivative of L² is 2L, the derivative of a number times L is just that number, and the derivative of a plain number is 0.
For Q = 12L − L²: dQ/dL = 12 − 2L.
Diminishing returns: why MP falls
When MP gets smaller as we add more input, we say there are diminishing marginal returns. The farm has only so much land and so many tools, so extra workers share them.
In maths: MP = 12 − 2L gets smaller as L grows. Its own derivative is −2, which is negative. So the curve bends downward (it is concave).
Where MP = 0, the curve is flat at its top. Here that is at L = 6 and Q = 36 sacks. Adding workers after this would make output fall (MP becomes negative).
Same idea: marginal cost and marginal revenue
All 'marginal' words in economics are derivatives.
- Marginal cost MC = dC/dq: the extra cost of making one more item.
- Marginal revenue MR = dR/dq: the extra money from selling one more item.
Example: if the cost is C = 100 + 5q + q², then MC = 5 + 2q. At q = 10, MC = 25 rupees. The fixed 100 disappears in the derivative, because it does not change when you make one more item.
Try it: find the marginal product yourself
- Open the 3D and jump to the last step. Set the slider to 2 workers. Write down the slope. Now guess the slope at 5 workers before you move the slider. Check your guess.
- At home, take a pile of 20 sheets of paper and fold paper boats for 2 minutes alone, then with one friend, then with two friends. Write the number of boats each time. Subtract to find the marginal product of each friend.
- Does the third person help as much as the first friend? Why or why not?
Key formulas and definitions
- MP = ΔQ / ΔL (counting, whole units)
- MP = dQ/dL (smooth formula; slope of the tangent)
- Power rule: d(Lⁿ)/dL = n·Lⁿ⁻¹; d(aL)/dL = a; d(number)/dL = 0
- Diminishing returns: MP falls as L grows (d²Q/dL² < 0)
- Output is highest where MP = 0
- MC = dC/dq, MR = dR/dq
Worked examples
1. 3 workers make 27 sacks and 4 workers make 32 sacks. Find the marginal product of the 4th worker.
MP = ΔQ / ΔL = (32 − 27) / (4 − 3) = 5 sacks.
2. Q = 12L − L². Find the output with 4 workers.
Q = 12 × 4 − 4² = 48 − 16 = 32 sacks.
3. For Q = 12L − L², find MP using the derivative.
Differentiate: dQ/dL = 12 − 2L. This is the formula for MP at any L.
4. For Q = 12L − L², find MP when L = 2.
MP = 12 − 2L = 12 − 2 × 2 = 12 − 4 = 8 sacks per extra worker.
5. For Q = 30L − 2L², find the MP when L = 5.
dQ/dL = 30 − 4L. At L = 5: 30 − 4 × 5 = 30 − 20 = 10.
6. For Q = 12L − L², at what L does output become highest, and what is the highest output?
Set MP = 0: 12 − 2L = 0, so L = 6. Then Q = 12 × 6 − 6² = 72 − 36 = 36 sacks.
7. The cost of making q toys is C = 100 + 5q + q². Find the marginal cost at q = 10.
MC = dC/dq = 5 + 2q. At q = 10: 5 + 20 = 25 rupees.
8. Q = 20L − L². Show that MP is falling, and find where it becomes zero.
MP = 20 − 2L. Each extra worker lowers MP by 2, so it falls. MP = 0 when 20 − 2L = 0, so L = 10.
Common mistakes
- Mixing up total product and marginal product. Q is the whole output. MP is the extra from one more worker.
- Forgetting that a plain number disappears when you differentiate (the 100 in a cost formula).
- Thinking falling MP means falling output. Output still rises while MP is positive, just more slowly.
- Putting the number in before differentiating. First find dQ/dL = 12 − 2L, then put L in.