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Production in the Short Run

This analysis explores short-run wheat production using Total Physical Product (TPP) and illustrates the relationship between the number of farm workers and wheat output. It delves into the law of diminishing returns, emphasizing that as additional units of labor are employed, the increase in production will eventually decline. The concept of Marginal Physical Product (MPP) is introduced, showing how to calculate MPP and Average Physical Product (APP). The findings are crucial for optimizing resource allocation in agricultural practices.

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Production in the Short Run

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  1. Production in the Short Run

  2. Short-run production Total physical product (TPP)

  3. Wheat production per year from a particular farm Number of workers 0 1 2 3 4 5 6 7 8 TPP 0 3 10 24 36 40 42 42 40 Tonnes of wheat produced per year Number of farm workers

  4. Wheat production per year from a particular farm Number of workers 0 1 2 3 4 5 6 7 8 TPP 0 3 10 24 36 40 42 42 40 Tonnes of wheat produced per year Number of farm workers

  5. The law of diminishing (marginal) returns A more units of the variable factor are used, there will come a point where additional units of the variable factor will produce less than previous units.

  6. Wheat production per year from a particular farm Maximum output Diminishing returns set in here d TPP Tonnes of wheat produced per year b Number of farm workers

  7. Short-run production Marginal physical product (MPP) = TPP/Qf

  8. Wheat production per year from a particular farm DTPP = 7 DL = 1 MPP = DTPP / DL = 7 TPP Tonnes of wheat per year Number of farm workers (L) Tonnes of wheat per year Number of farm workers (L)

  9. Wheat production per year from a particular farm TPP Tonnes of wheat per year Number of farm workers (L) Tonnes of wheat per year Number of farm workers (L) MPP

  10. Short-run production Average physical product (APP) = TPP/Qf

  11. Wheat production per year from a particular farm TPP Tonnes of wheat per year Number of farm workers (L) Tonnes of wheat per year Number of farm workers (L) MPP

  12. Wheat production per year from a particular farm APP = TPP / L TPP Tonnes of wheat per year Number of farm workers (L) Tonnes of wheat per year APP Number of farm workers (L) MPP

  13. Wheat production per year from a particular farm b Diminishing returns set in here b TPP Tonnes of wheat per year Number of farm workers (L) Tonnes of wheat per year APP Number of farm workers (L) MPP

  14. Wheat production per year from a particular farm d Maximum output d TPP Tonnes of wheat per year b Number of farm workers (L) b Tonnes of wheat per year APP Number of farm workers (L) MPP

  15. Wheat production per year from a particular farm c Slope = TPP / L = APP c d TPP Tonnes of wheat per year b Number of farm workers (L) b Tonnes of wheat per year APP d Number of farm workers (L) MPP

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