Marginal product

 

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Marginal product

In a production function, the marginal product of a factor is the increase in output due to a unit increase in the input of the factor; that is, the partial derivative of the production function with respect to the factor. In a competitive equilibrium, the equilibrium price of any factor is its marginal value product in every sector where it is employed.



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Marginal propensity to save

Marginal propensity to save

The fraction of a change in income (or perhaps disposable income) that is saved.


Marginal utility

Marginal utility

The change in total satisfaction as a result of consuming one additional unit of a specific good or service.


Marginal value product

Marginal value product

The value of the marginal product of a factor in an industry; that is, the price of the good produced times the marginal product. Determines factor prices when all markets are competitive.


Marginal tax rate

Marginal tax rate

The tax rate that would have to be paid on any additional dollars of taxable income earned.


Marginal revenue product

Marginal revenue product

The additional revenue generated by the extra output from employing one more unit of a factor of production. In a competitive industry this equals the marginal value product, but with imperfect competition it is smaller, due to the implied price reduction. Determines factor prices in competitive factor markets.


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