Economic Definition of MP. Defined.
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Term MP Definition: The abbreviation for marginal product, which is the change in the quantity of total product resulting from a unit change in a variable input, keeping all other inputs unchanged. Marginal product is found by dividing the change in total product by the change in the variable input. Marginal product lies at the very foundation of the analysis of short-run production and the subsequent explanation of the law of supply and the upward-sloping supply curve, using the law of diminishing marginal returns. Of the myriad of short-run production-related terms (including total product, average production, fixed input, variable input, short run, long run) marginal product is by and far the most important.