Marginal product is at its maximum when marginal cost is at its minimum.

Question

Quizplus · Accepted Answer

This statement is true according to the law of diminishing marginal returns. As output increases, eventually marginal product will begin to decrease due to limited resources. Marginal cost, on the other hand, will initially decrease as output increases due to economies of scale, but eventually will begin to increase as resources become more scarce. Thus, the point where marginal product is at its maximum will coincide with the point where marginal cost is at its minimum.

Marginal Product Is at Its Maximum When Marginal Cost Is