Average product

The average product ( AP , eng. Average product ) is the volume of output, referred to the unit of resources used ^[1] . The average product characterizes the productivity of a variable factor of production , therefore the average product of labor is often called labor productivity ^[2] . The average product of this factor increases until its marginal product exceeds the average, and, conversely, decreases when the ratio between these two indicators becomes inverse ^[3] . The marginal product curve intersects the average product curve at the maximum point of the latter. This tendency is called the law of diminishing marginal productivity (profitability) of production factors: as the quantity of a variable factor increases, while the quantity of all the others remains constant, the marginal product of the variable factor will begin to decrease ^[4] .