ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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at the maximum point of the marginal product curve.
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where total product is at a maximum.
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where marginal product equals zero.
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at the maximum point of the average product curve.
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Detailed explanation-1: -Also notice that the marginal product curve intersects the average product curve at the maximum point on the average product curve. When marginal product is above average product, average product is rising. When marginal product is below average product, average product is falling.
Detailed explanation-2: -Answer and Explanation: The marginal physical product curve and average product curve always intersect at the maximum of the average product curve. If it is less than the maximum then additional labor increases the average product.
Detailed explanation-3: -Therefore, MP intersects the AP curve at the maximum AP. The intuitive explanation for the relationship between MP and AP is that MP represents the contribution of an additional worker. If that worker adds more to total output than the average, then the average is pulled up.
Detailed explanation-4: -Total product is at its maximum if and only if marginal product is zero. When average product is equal to marginal product, average product is at its maximum.
Detailed explanation-5: -Marginal Product is the defined as the change in total product resulting from one additional unit of a variable factor. For output to be maximized the marginal product should be 0. As if marginal product ≥ 0 it is profitable to increase production. If marginal product ≤ 0 it is profitable to decrease production.