Which of the following is a correct statement about the relationship between average product (AP) and marginal product (MP) ?
Correct answer: C. If AP exceeds MP then AP is falling
- A. If TP is declining, then AP is negative
- B. If AP = MP, then total product is at a maximum.
- C. If AP exceeds MP then AP is falling
- D. If AP is at a maximum, then MP is also,
Explanation
When marginal product is below average product, the new unit pulls the average down, so AP is falling. AP equals MP at AP's maximum, not when total product is at its maximum.
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