This is the proportions in which factors of production are engaged in economic activities to produce goods and services. Factor combination is closely associated with the production function.

Total Product (T.P):-Total product ( total physical product) is the sum of output produced by combining factors of production.

Average product (AP):- Average product or average physical product is the output per unit of the variable factor. It is obtained by dividing the total product (TP) by the number of units of the variable factor employed.

Marginal product(MP):- Marginal physical product is the additional unit of output resulting from employing an extra unit of a variable factor.

Example: Assume land a fixed factor and labour a variable factor.

Table 1.10

Land (N)	N0 of worker	T.P	AP	MP
1 1 1 1 1 1 1 1 1 1	1 2 3 4 5 6 7 8 9 10	3 7 12 18 21 23 24 24 21 15	3 3.5 4 4.5 4.2 5.8 3.4 3.0 23 1.5	3 4 5 6 3 2 1 0 -3 -6

NOTE AP = TP, AP - Average product

L TP - Total Product

L - Units of labour employed at each level of output

MP = TP , MP - marginal product

L TP - Change in total product.

L - Change in Labour units employed.