When labor is the only input to the production function, why must it be true that when the marginal product of labor is greater than the average product of labor, the average product of labor is increasing and vice versa?
A)When the marginal product of labor is above the average product of labor, an additional unit of labor will produce a greater marginal product than average, thus raising the average.
B)When the marginal product of labor is below the average product of labor, an additional unit of labor will produce a greater marginal product than average, thus raising the average.
C)When the marginal product of labor is above the average product of labor, an additional unit of labor will produce a smaller marginal product than average, thus reducing the average.
D)When the marginal product of labor is above the average product of labor, an additional unit of labor will produce a zero marginal product.

Question

Quizplus · Accepted Answer

When the marginal product of labor is greater than the average product of labor, it means that the additional unit of labor is producing more output than the average unit of labor. This will increase the average product of labor because the new unit of labor increases the total output by a larger amount than the increase in the number of units of labor. This is the definition of the average product of labor increasing. The opposite is true when the marginal product of labor is less than the average product of labor. When the marginal product of labor is greater than the average product of labor, an additional unit of labor will produce a greater marginal product than average, which means the average product of labor will increase. This is because the additional unit of labor is contributing more to the production of output than the existing units of labor, thus increasing the average product. The opposite is also true: when the marginal product of labor is less than the average product of labor, an additional unit of labor will contribute less to production than the existing units of labor, decreasing the average product of labor. Therefore, only statement A is accurate.

When Labor Is the Only Input to the Production Function