Question:
Which of the following is true regarding the marginal product (MP) and average product (AP) curves?
(1) MP intersects AP at its minimum point.
(2) AP rises when MP is below it.
(3) AP falls when MP is above it.
(4) MP intersects AP at its maximum point.
(5) MP and AP are always parallel.
Correct Answer:
(4)
Answer Explanation:
Mathematical rule: When the marginal value is above the average, the average rises. When marginal is below, average falls. Therefore, the MP curve must cut the AP curve exactly at its maximum point.
Topic: Production Year: 2024
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