Figure 13-1
-Refer to Figure 13-1. Suppose the production function shifts from TP2 to TP1. Such a shift in the total product curve is most likely due to a decrease in the firm's
A) costs of production.
B) product price.
C) market share.
D) productivity.

Question

Figure 13-1 
-Refer to Figure 13-1. Suppose the production function shifts from TP2 to TP1. Such a shift in the total product curve is most likely due to a decrease in the firm's
A) costs of production. 
B) product price. 
C) market share. 
D) productivity.

Quizplus · Accepted Answer

The shift from TP2 to TP1 suggests that the firm is producing fewer output levels with the same amount of inputs. This indicates a decrease in productivity, which is why the correct option is D. A reduction in costs of production or product price could shift the total product curve outward, increasing the level of output for a given set of inputs. A change in market share alone is unlikely to cause a shift in the total product curve.

Figure 13-1 -Refer to Figure 13-1. Suppose the Production Function Shifts from Function