Distinguishing Between Marginal Productivity and Marginal Cost

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The relationship between marginal product and total product can further be analysed through different stages of production, like:

Increasing marginal returns: In this, the efficiency of inputs increases because of better utilisation of fixed resources and coordination in inputs.
In short, the total product increases at an increasing rate, the marginal product is positive and increasing, and every extra unit of input contributes to the output more than the old one.
Diminishing marginal returns: In this, more units of input are added, and the fixed inputs become crowded, which results in reduced efficiency.

In other words, the total product increases at a decreased rate, the marginal kenya phone number list product is positive but decreasing, and each additional unit of input contributes less to the output than the old one.
Negative marginal returns: At this stage, the input is overused to the point where it restricts production efficiency. The negative marginal returns occur due to major overcrowding and excessive use of inputs, which leads to inefficiencies or less output.
In other words, the total product in this starts to decrease, the marginal product becomes negative, and each extra unit of input reduces the total output.

The difference between the marginal productivity and marginal cost for sellers is explained below.