Share This Article:

Economic Definition of average product. Defined.

Offline Version: PDF

Term average product Definition: The quantity of total output produced per unit of a variable input, holding all other inputs fixed. It is found by dividing total product by the quantity of the variable input. Average product, abbreviated AP also goes by the alias of average physical product (APP), so don't be confused by the extra term (physical). Compare this term with marginal product and average revenue product when you have a chance. If you haven't yet come across the term, then you really should spend some time with the law of diminishing marginal returns. The average-marginal rule is also worth a look.


« average physical product | average product and marginal product »


Alphabetical Reference to Over 2,000 Economic Terms