The reason for my choice to put this up here is because this is a topic we covered at the end of our last episode of the podcast. This is one of those things that is both common sense and common sense.
I’m sure there are many more examples of this common sense. When a company is in the business of making money, that requires them to make more of it than they could ever sell. When the company is in the business of making a profit, that means they can make a lot more of it than they could ever sell in the first place.
This is what makes this subject so fascinating to me. I love the concept that the marginal product of labor (MPL) is the amount of goods or services a company makes per unit of labor. That is, a company that makes $1M worth of goods and services per unit of labor, that’s a net profit. When the company makes $1M worth of goods and services per unit of labor, that’s an average product of labor.
So if we look at it this way, if a company makes 100% of its profit from selling its products, its average product of labor is 100% of the company’s total goods and services. To make a net profit on its average product of labor, it would need to sell less than 100% of its total goods and services.
We don’t think about this in a negative way. Just because a company has 100 of its product of labor every day doesn’t mean that their employees are going to be going bankrupt. As soon as a company starts selling its products, it’s going to be hard to sell its products to someone who doesn’t have any money but is willing to pay for it.
So in some sense, it seems to be the case that the marginal product of labor and average product of labor are the same. That is, they are both the product of labor. However, the average product of labor is also the product of a company. What this means is that the average cost of a company’s products is equal to the cost of the company’s labor. In other words, the average cost of its goods equals its average labor.
There is a difference between the price of the product and the unit quantity. For example, the price of a bottle of wine is its marginal cost. That is, the cost of that bottle of wine is equal to the cost of the unit quantity of wine. However, the unit quantity of wine is the average quantity of wine that you will find in stores. The price of the wine is the average price of its unit quantity.
The average price of the bottle of wine. The average price of the bottle of wine is about the average price of the bottle of wine. The average price of another bottle of wine is the average price of the bottle of wine. What makes it better is that it is better for the average bottle than the average bottle of wine.
This is because the average price of a bottle is the price of the equivalent unit quantity of wine. The average price of the bottle of wine is that of the equivalent quantity of wine. It is not the average price of the bottle of wine. The average price of a wine is the average price of the unit quantity of wine.
The average price of a beer is the average price of the unit quantity of beer. The average price of a beer is the price of the equivalent quantity of beer.
