In the short run,the firm's product curves show

Question

Quizplus · Accepted Answer

In the short run, when the marginal product (MP) of the variable input decreases and becomes zero, the total product (TP) is at its maximum. This is because the variable input is being used most efficiently in producing output until a certain point, after which adding more of the variable input starts to lead to diminishing returns. Therefore, the TP curve starts to slope downwards after this point. Option A is incorrect because AP reaches its minimum when MP = 0, not MP = AP. Option C is incorrect because TP can still increase even when AP begins to decrease, as long as MP is positive. Option D is incorrect because MP > AP implies that AP is increasing, not decreasing. Option E is incorrect because AP will only start to fall when the MP curve cuts the AP curve from above, not below.

In the Short Run,the Firm's Product Curves Show