When Marginal Physical Product (MPP) is Zero, what happens to Total Physical Product (TPP)? (MCAER 2017)

✔Explanation: In the realm of production economics, the Marginal Physical Product (MPP) signifies the additional output generated by employing one more unit of a variable input (like labor) while keeping other inputs constant. When MPP reaches zero, it signifies that adding more of the variable input no longer contributes to increased output. This point marks the maximum level of Total Physical Product (TPP), as any further increase in the variable input will lead to a decline in MPP and subsequently TPP.
🔑Key Points
– The Marginal Product (MP) is defined as the change in output that results from changing the input by one unit, assuming all other inputs are kept constant. In other words, it measures the additional quantity of output that is produced if one more unit of an input (like labor or capital) is added, while other input factors are held constant.
-This concept is primarily used in the field of microeconomics, specifically in production theory and labor economics, to understand the productivity of inputs and guide decisions about the allocation of resources. The Marginal Product can either increase, remain constant or decrease as input increases, based on the principles of increasing, constant, and diminishing marginal returns, respectively.