When the marginal product of labor is falling, the average product of labor is falling.

Question

Quizplus · Accepted Answer

When the marginal product of labor is falling, it does not necessarily mean the average product of labor is falling; it only indicates that each additional unit of labor is contributing less to output than the previous one. The average product of labor could still be rising if the marginal product is above the average product.

When the Marginal Product of Labor Is Falling, the Average