A firm's total product reaches its maximum level when the marginal product of the variable input is:
Correct answer: C. Equal to zero
- A. At its highest positive value
- B. Equal to the average product
- C. Equal to zero
- D. Greater than total product
Explanation
Marginal product measures the change in total product caused by one additional unit of input. Total product stops rising and reaches its maximum when marginal product becomes zero.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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