The correct option is B. Marginal Product. Explanation of the Correct Answer Marginal Product refers to the additional output that is produced when one more unit of a variable input (like labor or raw materials) is added, while keeping all other inputs constant. This concept is crucial in the Theory of Production, which studies how different inputs are combined to produce outputs. Step-by-Step Breakdown:

1. Understanding Inputs and Outputs:
2. In production, we have various inputs (like labor, capital, land) that are combined to produce outputs (goods or services).
3. When we talk about a variable input, we mean an input that can be changed in the short run, such as the number of workers hired.
4. Defining Marginal Product:
5. The Marginal Product (MP) is calculated as the change in total output (Total Product, or TP) that results from employing one additional unit of a variable input.
6. Mathematically, it can be expressed as: [ MP = \frac{\Delta TP}{\Delta L} ] where ( \Delta TP ) is the change in total product and ( \Delta L ) is the change in the quantity of labor (or the variable input).
7. Example Calculation:
8. Suppose a factory produces 100 units of a product with 5 workers. If adding a 6th worker increases production to 120 units, the Marginal Product of the 6th worker would be: [ MP = \frac{120 - 100}{1} = 20 \text{ units} ]
9. This means the 6th worker contributed an additional 20 units to total production.
10. Importance of Marginal Product:
11. Understanding MP helps businesses make decisions about hiring and resource allocation. If the MP of an additional worker is greater than the cost of hiring that worker, it makes economic sense to hire them.

Explanation of Incorrect Options A. Total Product: - Total Product (TP) refers to the total quantity of output produced by all units of input. It does not focus on the additional output from one more unit of input, which is what Marginal Product does. Therefore, while TP is related, it does not answer the question directly. C. Average Product: - Average Product (AP) is the total output produced divided by the number of units of input used. It gives an average measure of productivity but does not indicate the additional output from adding one more unit of input. Thus, it is not the correct answer. D. Diminishing Returns: - The Law of Diminishing Returns states that as more units of a variable input are added to fixed inputs, the additional output (Marginal Product) eventually decreases. While this concept is related to Marginal Product, it describes a phenomenon rather than defining the additional output itself. Therefore, it is not the correct answer. Revision Summary

• Marginal Product is the additional output from adding one more unit of a variable input while keeping other inputs constant.
• It is calculated as the change in total output divided by the change in the quantity of the variable input.
• Total Product and Average Product measure overall output and average productivity, respectively, but do not focus on the incremental output from additional inputs.
• The Law of Diminishing Returns explains how Marginal Product can decrease as more units of input are added, but it is not the definition of Marginal Product itself.