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Average Product (AP)

Ap

Average product is per unit product of the variable factor. In other words, average product is obtained by dividing total product by the total units of variable factor used. Thus,
AP= TP/L
Where,
AP= Average Product 
TP= Total Product
L= Labour 

Initially, AP  increases at a slower rate , becomes maximum, and diminishes. 

Average Product Curve

AP curve begins from the origin. As the units of variable factors are increased, it increases at a decreasing rate, reaches a maximum point, and the begins to decline. AP curve is inverted U-shaped. As long as TP is positive, AP is positive. It can be illustrated with the help of an AP schedule given in the table below:

Units of Labour(L)Total Product(TP)Average Product(AP)
000
11010
23015
36020
48020
59018
69015
78011.4
 From the above table, it is clear that initially , AP is zero and then increases upto the 3rd unit of labour is employed, becomes stable when the 4th unit of labour is employed, and then begins to decline. But it never becomes zero and negative. It is graphically explained with the help of figure given below:

 In the figure, units of labour are shown on the  X-axis and average product on the Y-axis. AP increases up to the point A and it and it is stable at the point B. Thereafter, it declines. So, it takes an inverted U shape.