19. Short Run Production, Marginal and Average Product

This video describes the key components of short run production: marginal and average product. In particular, I give reasons for (1) why MP and AP are typically inverse-U shaped, and (2) why MP intersects AP at AP's maximum.

There is also a more general discussion of the relationship of average to marginal.

For a list of videos and links to these videos (organized by topic), check out the Intromediate Microeconomics video web page:

http://blog.thisyoungeconomist.com/p/learn-microeconomics.html

Category:

Education

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• short run production
• marginal product
• average product
• diminishing marginal returns
• averages versus marginals
• economics lectures
• microeconomics lectures
• producer theory lectures
• producer theory
• intromediate microeconomics
• tutorial

[hillaryishillary]

what's the x-axis and y-axis of the graph?

[intromediateecon]

@hillaryishillary The y-axis is Quantity per unit of Labor and the x-axis is Units of Labor (we usually measure units of labor in terms of worker-hours. Hence, a 4 person team working an 8 hour shift would count as L = 32 (8*4).

[vik238]

good video. suggestion: you could show the TP (or production) function before the marginal and average products.

[intromediateecon]

@vik238 Thanks for the suggestion.

That's actually how I do it in the book (see page 77). The intuition for drawing TP is identical to drawing marginal product, so I thought that it wasn't worth the board space for this video, but your point is well taken. If I ever re-film the videos, I may incorporate your suggestion.

[GSellers100]

Great content. Thorough explanation. Thanks, it helped me a lot.

[solidsnake32292]

I HAVE MY FINAL TMRW MORNING AND U JUST MADE ME SOOOOO MUCH HAPPIER THAN I WAS THIS ENTIRE SEMESTER!!!! WHO ARE YOU BECAUSE U R MY HERO!!!!!!!!!! and smarter than my professor in a new york state university haha

[Cabralski29]

watched a couple of your videos now..man, i wish you were my teacher..

[roro22v]

GREAT video, you really helped me understand this concept so much more!!

[TheOWhoaShow]

great video, thanks for this, also you remind me of seth rogen

[hillaryishillary]

@intromediateecon thanks! 

[OopsFailedArt]

Thanks for this, I'm taking the Microeconomics CLEP tomorrow, and these videos are really helping me put the last blocks in place.

[kilimitinu]

very helpful, easy but really constructive explanation!

Although your beisbol example got me confused at first!