AVERAGE PHYSICAL PRODUCT: The quantity of total output produced per unit of a variable input, holding all other inputs fixed. Average physical product, usually abbreviated APP, is found by dividing total physical product by the quantity of the variable input. Average physical product is actually just another name for average product (AP). But don't be confused by the extra term (physical).

     See also | total product | variable input | fixed input | total physical product | average product | average revenue product | marginal productivity theory | factor markets | marginal physical product | marginal revenue product | law of diminishing marginal returns |

AVERAGE PHYSICAL PRODUCT, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 14, 2025].

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The state of resource allocation that exists when the highest level of consumer satisfaction is not achieved from available resources. This state occurs in market exchanges if the price buyers are willing and able to pay for a good does not reflect the satisfaction everyone obtains from the consuming the good or if the price sellers need to charge for a good does not reflect all opportunity cost of producing the good.

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