Average product measures the average amount of output produced per unit of input used. It is calculated by dividing total product by the quantity of inputs.
Related terms
Diminishing returns: Diminishing returns occur when adding more units of input leads to smaller increases in average and marginal products.
Production function: A production function represents the relationship between inputs (such as labor and capital) and outputs produced by a firm.
Total cost: Total cost is calculated by adding up all fixed and variable costs incurred in producing a given quantity of output.