Final answer:
The marginal product is the extra output produced by adding an additional unit of labor to the production process. It initially may increase due to better capital utilization but eventually decreases due to the Law of Diminishing Marginal Product.
Step-by-step explanation:
The definition of marginal product is the additional output that a firm is able to produce by adding one more unit of labor, for example, one more worker, to the production process. This concept relates to the idea that each additional worker adds to the total output of the firm. Mathematically, the marginal product (MP) is expressed as the change in total product (ATP) divided by the change in labor (AL), so MP = ATP/AL. Initially, as workers are added, the marginal product might increase if they can utilize capital more efficiently, such as two workers using a two-person saw better than one. However, due to the Law of Diminishing Marginal Product, eventually adding more workers leads to a decrease in the marginal product as the capital becomes a limiting factor.