By adding all the marginal products at each level of employment of the variable input, we obtain a value equal to?

A. average product
B. total product
C. average variable cost
D. total cost

Correct Answer: Option B

B. total product

Explanation

Total product is the overall quantity of output that a firm produces, usually specified in relation to a variable input. Total product is the starting point for the analysis of short-run production. It indicates how much output a firm can produce according to the law of diminishing marginal returns.

Marginal Product (MP) = Change in Total Product / Change in Variable Factor

Total Product (TP) = AP X Variable Factor