When the marginal product of labor is at its maximum, the marginal cost is at its minimum.

Question

Quizplus · Accepted Answer

When the marginal product of labor is at its maximum, it means that each additional unit of labor is producing the greatest amount of output. This results in a lower marginal cost, as the cost of producing each additional unit of output is decreasing. Therefore, when the marginal product of labor is at its maximum, the marginal cost is at its minimum.

When the Marginal Product of Labor Is at Its Maximum