Final answer:
The notion that marginal product is the additional output from adding one or more units of input is true. This concept is important for understanding production efficiency and the Law of Diminishing Marginal Product.
Step-by-step explanation:
The statement that marginal product is the extra output due to the addition of one or more units of input is true. Marginal product refers specifically to the additional output or change in total product that results from the addition of one more unit of variable input, such as labor. In the context of labor, if a firm hires an additional worker (or adds a worker hour), the output produced by that worker is the marginal product. This concept is imperative in understanding how production and efficiency vary with changes in the input levels. As more input is added, initially, the marginal product may increase due to factors like increased specialization or better utilization of equipment. However, due to the Law of Diminishing Marginal Product, there comes a point where adding more input will result in a smaller increase in output and eventually could lead to a decrease in output.