Suppose labor (L) is the variable input in some production process and machinery is a fixed input. Q represents output, MP is marginal product of labor or the added output due to the addition of another worker, and AP is average product of labor or Q divided by L.
As labor increase, output rises, but in the short run it increases at
a decreasing rate after the first few workers. As we can see,
diminishing marginal product sets in after the 3rd worker. This
is the law of diminishing returns and is strictly a short run
phenomenon.
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| Labor | Q | MP | AP |
| 0 | 0 | 0 | 0.0 |
| 1 | 4 | 4 | 4.0 |
| 2 | 13 | 9 | 6.5 |
| 3 | 23 | 10 | 7.7 |
| 4 | 32 | 9 | 8.0 |
| 5 | 40 | 8 | 8.0 |
| 6 | 47 | 7 | 7.8 |
| 7 | 53 | 6 | 7.6 |
| 8 | 58 | 5 | 7.3 |
| 9 | 62 | 4 | 6.9 |
| 10 | 65 | 3 | 6.5 |