With all other factors remaining constant, this is output taken by adding one more production factor unit, like a labor hour or a machine hour. Marginal product measures physical units produced. Contrast marginal cost, which indicates additional cost from producing a single added output unit, against marginal product, which indicates additional output based on a single input unit. Also known as marginal physical product.

More On This Topic

Link to This Definition
Did you find this definition of MARGINAL PRODUCT helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary