208 PART • Producers, Consumers, and Competitive Markets Output per month D 112 F IGURE 6.1 C Total Product PRODUCTION WITH ONE VARIABLE INPUT The total product curve in (a) shows the output produced for different amounts of labor input The average and marginal products in (b) can be obtained (using the data in Table 6.1) from the total product curve At point A in (a), the marginal product is 20 because the tangent to the total product curve has a slope of 20 At point B in (a) the average product of labor is 20, which is the slope of the line from the origin to B The average product of labor at point C in (a) is given by the slope of the line 0C To the left of point E in (b), the marginal product is above the average product and the average is increasing; to the right of E, the marginal product is below the average product and the average is decreasing As a result, E represents the point at which the average and marginal products are equal, when the average product reaches its maximum B 60 A 10 Labor per Month (a) 30 Output per worker 20 per month E Average Product 10 Marginal Product (b) 10 Labor per month We have seen that the marginal product is above the average product when the average product is increasing and below the average product when the average product is decreasing It follows, therefore, that the marginal product must equal the average product when the average product reaches its maximum This happens at point E in Figure 6.1 (b) Why, in practice, should we expect the marginal product curve to rise and then fall? Think of a television assembly plant Fewer than ten workers might be insufficient to operate the assembly line at all Ten to fifteen workers might be able to run the assembly line, but not very efficiently If adding a few more workers allowed the assembly line to operate much more efficiently, the marginal product of those workers would be very high This added efficiency, however, might start to diminish once there were more than 20 workers The marginal product of the twenty-second worker, for example, might still be very high (and above the average product), but not as high as the marginal product of the nineteenth or twentieth worker The marginal product of the twenty-fifth worker might be lower still, perhaps equal to the average product With 30 workers, adding one more worker would yield more output, but not very