Answer :

Total product means the total volume of goods produced during the specified period of time. The total product can be increased only by increasing the quantity of variable input employed in production.

For example, if a firm is producing shirts using labour and capital then as the quantity of labour will increase the total product will also increase but only up to a certain level that is up to the maximum capacity. Suppose the capacity of a firm is to keep 100 machines on which 100 workers can be employed then even if we increase the manpower to 150, it will not increase the total production rather it will reduce the capacity of labour.

Let's go through the following product schedule to understand it –

Now, see that with every increasing unit of labour the total product is increasing but the total product is constant when 5 men and 6 men are employed after that it is decreasing even when input is increasing. This means the maximum capacity of firm is to produce 170 units.

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