Question

When the Average Product(AP) is maximum, the Marginal Product(MP) is:

• A. Equal to AP.
• B. Less than AP.
• C. More than AP.
• D. Can be any one of the above

Answer 1

The correct option is A Equal to AP.

As long as the AP increases, it must be the case that MP is greater than AP. Otherwise, AP cannot rise.

Similarly, when AP falls, MP has to be less than AP.

It, therefore, follows that MP curve cuts AP curve from above at its maximum.

When AP is maximum, MP is equal to AP.