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Types of Marginal Productivity:

The theory of marginal productivity can be understood more clearly by gaining knowledge regarding the different types of marginal productivity.

The different types of marginal productivity are explained as follows:

i. Marginal Physical Productivity:

Refers to an increase in output occurred due to the increase in one unit of factor of production. According to M.J. Ulmer, “Marginal physical productivity may be defined as the addition to total production resulting from employment of one unit of a factor of production, all other things being constant.”

Let us understand the concept of marginal physical productivity with the help of an example. Suppose one labor is able to produce four quintals of wheat. If one more labor is hired, then the yield of wheat would reach to eight quintals. In such a case, the marginal physical productivity for the additional labor is four quintals of wheat (8-4=4).