Question

At the existing level of output, MP = AP = 10 units. Would AP be equal to MP when production is increased and law of variable proportions is in operation?

• A. Yes
• B. No

Answer 1

The correct option is B

No

No. When production is increased beyond a point where MP = AP (implying AP is at its top), MP and AP should start declining. Fall in MP should be faster than the fall in AP. So that AP > MP.