If a firm experiences constant returns to the variable input in the short run:
A)marginal product will be greater than average variable product, but the two will become more equal as output increases.
B)marginal product will be less than average variable product, but the two will become more equal as output increases.
C)marginal product will be greater than average variable product, and the difference between the two will become larger as output increases.
D)marginal product and average variable product will be equal over the range of output in question.

Question

Quizplus · Accepted Answer

Constant returns to the variable input mean that marginal product does not change as the quantity of the variable input is increased. Since average variable product is simply total output divided by the quantity of the variable input, it will also remain constant. Therefore, marginal product and average variable product will be equal over the range of output in question.

If a Firm Experiences Constant Returns to the Variable Input