What is the correct mathematical relationship between average product (AP) and marginal product (MP) ?
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Answer: C. If AP exceeds MP then AP is falling
Explanation
Mathematically, when the marginal product is below the average product, it pulls the average down. This mathematical relationship ensures that average product is falling whenever it exceeds the marginal product. The marginal curve must intersect the average curve at the exact point where average product reaches its maximum. Average product equals total product divided by the total quantity of the variable input employed by the firm. Marginal product measures the change in total output resulting from adding one more unit of labor input. Production functions typically exhibit increasing marginal returns initially, followed by diminishing marginal returns.
Total product declining indicates negative marginal product rather than a negative average product value. Total product reaches its maximum when marginal product equals zero rather than when it equals average product. When average product is at its maximum, marginal product equals average product rather than being at its own maximum.
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