At the output level where a firm's average product of labour is at its maximum, the marginal product of labour is:
Correct answer: C. Equal to average product
- A. Greater than average product
- B. Less than average product
- C. Equal to average product
- D. Equal to total product
Explanation
The marginal product curve intersects the average product curve at the maximum point of average product. Before that point marginal product exceeds average product, and after it marginal product is lower.
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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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