With all other inputs held constant, the total physical product of 5 units of labour is 60 units. What is the average product of labour at this level?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 12 units
Total physical product is another name for total product. Average product is TP per unit of the variable input.
Given:
TP of labour = 60 units
Labour, L = 5 units
\( \displaystyle AP_L = \frac{TP}{L} = \frac{60}{5} = 12 \)
AP = 12 units
Option (2) 300 units — this multiplies 60 by 5 instead of dividing.
NCERT (2026-27): “3.3.1 Total Product … Let us again look at Table 3.1. Suppose capital is fixed at 4 units. Now in the Table 3.1, we look at the column where capital takes the value 4. As we move down along the column, we get the output values for different values of labour. This is the total product of labour schedule with K2 = 4. This is also sometimes called total return to or total physical product of the variable input. This is shown again in the second column of table in 3.2” “3.3.2 Average Product Average product is defined as the output per unit of variable input. … Values in this column are obtained by dividing TP (column 2) by L (Column 1). …” |