marginal physical product


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Fig. 118 Marginal physical product.

marginal physical product

the quantity of OUTPUT in the SHORT-RUN theory of supply produced by each extra unit of VARIABLE-FACTOR INPUT (in conjunction with a given amount of FIXED-FACTOR INPUT). The marginal physical-product curve, as shown in Fig. 118, rises steeply at first, reflecting increasing returns to the variable-factor input, but then falls as DIMINISHING RETURNS to the variable-factor input set in. See RETURNS TO THE VARIABLE-FACTOR INPUT, ISOQUANT MAP.
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6), also known as marginal physical product (MPPw) of the factor water, has an initially positive value and decreases as the total irrigation depth applied to the soil increases, as shown in Table 2.
The marginal physical product (MPP) for input utilization was derived from the maximum likelihood estimates of the stochastic production frontier model using the arithmetic mean value of output and input.
r = efficiency ratio; MVP = marginal value product of the variable input; MPP = marginal physical product; MFC = marginal factor cost, [P.sub.xi] (Unit price of input [X.sub.i]); [Q.sub.m] = mean value of output; [X.sub.mi] = mean value of input considered; [P.sub.Q] = unit price of output; [[beta].sub.i] = output elasticities.
It thus follows that the social marginal benefit of the non-labor input, the left-hand-side of (26), has to also exceed its private marginal benefit, the left-hand-side of (13), and this occurs only if the social planner opts for a smaller level of the non-labor input than the individual firm, does, given that the marginal physical product of the non-labor input is diminishing in its level, [f.sub.II](x)<0.
For example, the definition of exploitation adopted is: 'a group of workers are being exploited when their wage is less than the marginal physical product that they are producing, valued at the price at which it is being sold' (Robinson 1933, p.283).
The coefficient for N x LT was hypothesized to be positive because of an expected increase in the marginal physical product of applied nitrogen as soil quality increases over time.
It is the product of the marginal physical product of capital in industry Y ([[MPP.sub.K].sup.Y]) and the total amount of domestic capital.
In a competitive market, economic theory says that wages will equal workers' marginal revenue product, which is calculated as their marginal physical product times the market price of the goods or services they produce.(4) Expressing this relationship in aggregate rates of change produces an equilibrium condition in which wage growth should approximate the inflation rate plus productivity growth.(5) My earlier description of how human resource managers adjust pay rates questioned firms' ability to pinpoint marginal physical product at the individual worker level.
The result states that the change in input use in response to a shift in the output price schedule depends on how marginal physical product changes with quality.
According to the Stolper-Samuelson theorem (3), the factor used intensively in the expanding industry will be better off because the real return to the factor (i.e., the marginal physical product of the factor) will be increased in both the expanding industry and the contracting industry.

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