When the marginal product curve is above the average product curve, _______as output increases.
A) marginal product must decrease
B) average product must increase
C) marginal product must increase
D) average product must decrease

Question

Quizplus · Accepted Answer

When the marginal product of an input is above its average product, the average product increases as output increases. This is because the marginal product (the additional output from using one more unit of input) is pulling the average upwards.

When the Marginal Product Curve Is Above the Average Product