EXAMPLE 3-10 Calculation and Interpretation of Total, Average, and Marginal Product Average product and marginal product can be calculated on the basis of the production relationship between the number of machines and total product, as indicated in the first two columns of Exhibit 3-37. 2. Indicate where increasing marginal returns change to diminishing marginal returns. Chapter 3 131 EXHIBIT 3-37 Total, Average, and Marginal Product Machines (K) Total Product (TP Average Product (AP) Marginal Product (MP) 0 0 1 1,000 1,000 1,000 2 2,500 1,250 1,500 3 4,500 1,500 2,000 6,400 1,600 1,900 5 7,400 1,480 1,000 6 7,500 1,250 100 7,000 1,000 (500)