This is because the average product (AP) is found by dividing total product by the input of labour. For example, a company that produce 100kg of product with 10 workers has an average product of 10.

For a detailed explanation, taken a company A for example. If company A employs only one worker and with one worker, total production is 20kg each hour. This gives an average product of 20kg. Now if company A employs two workers and the total production is 50kg, the average product for the two workers give 25kg. Also when company A employs three workers and the total hourly production increase to 90kg, these means 30kg is the average product for the three workers and so on.

In this case, 3 workers produce 150kg of output therefore, the Average product of labour for the 3rd unit is 50kg. Given by:

Average product= TextTotalproductTextVariableproduct\frac{Text{Total product}}{Text{Variable product}}