CBSE Class 12-commerce Answered
Explain the relationship between MP and TP.
Asked by Topperlearning User | 25 Apr, 2016, 02:13: PM
Expert Answer
Here the table and the diagram below shows the following relationship between MP and TP:
- Till the third unit of variable factor, MP increases from 4 to 28 units and the TP increases for every additional unit. So long as MP is increasing, TP is increasing at increasing rate.
- But when MP starts diminishing at the 4th unit of variable factor input and the TP increases only at a decreasing rate.
- When 7th unit was applied, MP is zero, there is no addition to TP and TP is at maximum level.
- When MP is negative, TP starts declining at the 8th unit. TP diminish from 84 to 80 and the MP is negative -4.
Units of Fixed Factor |
Units of Variable Factor |
TP |
MP |
1 |
0 |
0 |
0 |
1 |
1 |
4 |
4 |
1 |
2 |
20 |
16 |
1 |
3 |
48 |
28 |
1 |
4 |
68 |
20 |
1 |
5 |
80 |
10 |
1 |
6 |
84 |
4 |
1 |
7 |
84 |
0 |
1 |
8 |
80 |
-4 |
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