Initial output: 100 lines of code

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Manufacturing industry: Imagine that a factory produces smartphones and has 20 workers. It manufactures 260 smartphones each day. The company has now added an extra worker, which results in 273 smartphone production. The marginal product here will be:

Initial output: 260 smartphones
New output: 273 smartphones
Change in output: 273-260 = 15 smartphones
Change in input: 1 worker
Marginal product = change in output/change in input = 15/1 = 13 smartphones per worker.

Technology industry: Consider that a software development team of 10 kenya phone number list developers makes 100 lines of code per hour. If the company hires one more developer, then the output will increase to 110 lines of code per hour. The marginal product will be:


New output: 110 lines of code.
Change in output: 110–100 lines of code = 10 lines of code
Change in developers (input): 1 developer
Marginal product = change in output/change in input = 10/1 = 10 lines of code per developer.

Significance of Marginal Product
Here are some of the key points that highlight the significance of the marginal product:

Production efficiency: Marginal product identifies the point at which an extra input starts to result in some results. It also helps in understanding when the inputs are no longer contributing to any profit in the production.