Read the given paragraph carefully and answer the following questions.

Total Product, Average Product and Marginal Product

The relationship between the variable input and output, keeping all other inputs constant, is often referred to as total product (TP) of the variable input. Average product (AP) is defined as the output per unit of variable input. Marginal product (MP) of an input is defined as the change in output per unit of change in the input when all other inputs are held constant. According to the law of variable proportions, the marginal product of an input initially rises and then, after a certain level of employment, it starts falling. As long as AP increases, it must be the case that MP is greater than AP. Otherwise, AP cannot rise. Similarly, when AP falls, MP has to be less than AP. It follows that MP curve cuts AP curve from above at its maximum.

A firm increased the capital by a unit, which led to a rise in total product from 10 units to 24 units. Further increase in capital in the same quantity leads to an increase in total product to 40 units. What is the difference in change in marginal product?

2

The correct answer is Option (2) → 2

We are given:

• Initial TP = 10 units

• After 1st unit increase in capital, TP = 24 → MP₁ = 24 - 10 = 14

• After 2nd unit increase in capital, TP = 40 → MP₂ = 40 - 24 = 16

Now, the question asks for the difference in change in marginal product:

Difference= MP2​ − MP1 ​= 16−14 = 2