When the marginal product of labour is greater than the average product of labour,
A)the average product of labour is increasing.
B)the marginal product of labour is increasing.
C)the total product curve is negatively sloped.
D)the firm is experiencing diminishing marginal returns.
E)the firm is experiencing constant returns.

Question

Quizplus · Accepted Answer

When the marginal product of labour is greater than the average product of labour, it means that each additional unit of labour is contributing more than the average contribution of the previous units. This will pull the average product of labour upwards, resulting in an increase in the average product of labour.

When the Marginal Product of Labour Is Greater Than the Average