Average and Marginal Productivity 2

The relationship between average and marginal productivity in the diagram is important in itself, and we will see similar relationships in future chapters. So let's look at it a little more closely. Average and marginal productivity will not always have the same slope. In general,

whenever average productivity is greater than marginal productivity, average productivity will slope downward.
whenever average productivity is less than marginal productivity, average productivity will slope upward.

The diagram does not show any values where average productivity is less, but a more complicated example might, and then we would see the second part of the relationship visualized.

To understand the relationship, think of it this way: as we add labor input, one unit after another, we add a bit more to output at each step. When the addition is greater than the average, it pulls the average up toward it. When the addition is less than the average, it pulls the average down toward it.