Definition – What is Marginal Product?
Marginal product is the ratio of change between an input (usually labor or capital) and an output (usually units produced).
Formula – How to Calculate Marginal Product
Marginal Product = Change in Output Produced ÷ Change in Input
An output increases by 700 in the same period as an input increases by 1,000.
Marginal Product = 700 ÷ 1,000 = 0.70
The marginal product is 0.70.