If the marginal product of labor is greater than the average product of labor, then the
A) marginal product must be increasing.
B) average product must be increasing.
C) marginal product must be decreasing.
D) average product must be decreasing.

Question

Quizplus · Accepted Answer

When the marginal product of labor is greater than the average product of labor, it means that the addition of the last unit of labor has produced more than the average output of the previous units. This causes the average product to increase because the new, higher marginal product pulls the average up.

If the Marginal Product of Labor Is Greater Than the Average