The Average Product (AP) is a concept in economics that measures the output produced per unit of input, typically labor. It is calculated by dividing the total product by the number of units of input used. For example, if a factory produces 100 units of a product using 10 workers, the average product per worker is 10 units. Understanding average product helps businesses assess efficiency and productivity. When the average product increases, it indicates that each worker is contributing more to the total output. Conversely, a declining average product may suggest diminishing returns, where adding more labor results in less additional output, a key concept in production theory.