Relationship between AP and TP.

Relationship between TP and AP

  1. Initially, as more and more units of labour inputs are employed, TP increases at an increasing rate. After this, TP increases but at decreasing rate. Simultaneously, AP continues to rise.
  2. When TP rises at a decreasing rate and reaches its maximum point, AP falls.
  3. When TP starts falling at increasing rate, AP also falls but at diminishing rate.
  4. AP is derived from TP as  
  5. TP can be ascertained from AP by multiplying units of output with AP.

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