What's the difference between marginal return and marginal product?

CFA Level I Economics
#1

hi there,

i’m not a native speaker, so i found it difficult to understand the following concept in curriculum, Reading 14, Section 3: Supply analysis:the firm.

There is an economic phenomenon known as increasing marginal returns, in which marginal product – the productivity of each additional unit of a resource – increses as additional units of that input are emplyed.

Are two concepts(marginal return and marginal product) the same?

Thanks

#2

Marginal revenue and marginal product are not the same.

Marginal product is the increase in _ units of output _ when one additional unit of input is added: how many more left-handed coffee cups can you make if you add one extra pound of porcelain clay , or one extra ceramicist , or one extra kiln?

Marginal revenue is the increase in _ revenue _ from making and selling one more unit of output: how much more revenue will you generate by making and selling one more left-handed coffee cup?

Marginal revenue product is these two numbers multiplied together; it’s the increase in _ revenue _ when one additional unit of input is added: how much more revenue will you generate by adding one extra pound of porcelain clay , or one extra ceramicist , or one extra kiln?

#3

yes, but what i am talking is Marginal Return, not Marginal revenue.

#4

My mistake: sorry.

Yes, marginal return is the same as marginal product.

#5

thank you!

#6

You’re welcome.

#7

Thank you for the explaining the differences between MP, MR and MRP nonetheless S2000magician, very clear.

#8

You’re quite welcome.