In economics, marginal product is the extra output thatcan be obtained by utilizing some of the units of input available (Hirschey, 2009). For example, marginal product can be produced when the labor units are increased from four to five units, assuming that the other units of production remain constant.
Where is the businesses use of an input and the is the change in the quantity of output. In case both the output and input indivisible, the marginal units obtained are infinitesimal. Marginal product of a resource is being considered to be up to some point beyond which, adding one resource factor decreases the overall production, a condition also known as Negative Returns (Tucker, 2011). The commonest resource most companies alter is the human resource base
The marginal product of a resource changes according to the three stages in the production function of a business. In the first stage, marginal product increases proportionally with the unit of input altered. The marginal product increases to a maximum. In the second case, marginal product increases at a decreasing rate or diminishing return. The marginal product decreases and cuts the average product at its maximum point. Production function in this case reaches the maximum point. The thirds stage is the decreasing return where the production function decreases and becomes smaller than the average product. In this case, average products decrease (Tucker, 2011).
The cardinal resources for productivity of goods and services include: labor, land, natural resources and capital. There are several factors that can change the demand for a resource. One of these is the seasons of the year especially for clothing. The prices of the finished products, the cost of assets such as machinery, premises etc. also affects the demand for resources.
References
Hirschey, M. (2009). Managerial economics (12th ed.). Mason, OH: South-Western Cengage
Learning.
Tucker, I. B. (2011). Survey of economics (7th ed.). Mason, OH: South-Western Cengage
Learning.
