Marginal Product
Plain definition
The extra output a firm gets from adding one more unit of an input (usually labor), while holding all other inputs fixed.
In economics
In production theory, marginal product (MP) is the change in total product divided by the change in the variable input. Because MC is derived from MP, the shape of the marginal-product curve determines the shape of the marginal-cost curve: MP first rises with specialization, then falls under diminishing returns.
Example
A bakery employing 5 workers makes 200 loaves a day; hiring a 6th worker raises output to 225 loaves. The marginal product of the 6th worker is 25 loaves per day.
People confuse marginal product with average product. Marginal product is the output added by the last worker hired; average product is total output divided by all workers. The two curves intersect where average product is at its maximum.