Consider a firm in the short run. When the total- product curve is increasing at an increasing rate
A) marginal product is positive but declining.
B) average product is falling.
C) the marginal- product curve lies below the average- product curve.
D) marginal product is positive and increasing.
E) average product is zero.

Question

Quizplus · Accepted Answer

When the total-product curve is increasing at an increasing rate, that means the marginal product is positive and increasing. This is because the additional unit of input is adding more to the total output than the previous unit. The average product may or may not be increasing depending on how much the marginal product is adding to the current average. However, it cannot be falling as stated in option B. Option A is partially correct as marginal product is positive but it is not declining. Option C is incorrect as the marginal-product curve lies above the average-product curve when the total-product curve is increasing at an increasing rate. Option E is incorrect as average product is not zero.

Consider a Firm in the Short Run