If in the short run a firm's total product is increasing, then its
A)marginal product must also be increasing.
B)marginal product must be decreasing.
C)marginal product could be either increasing or decreasing.
D)average product must also be increasing.

Question

Quizplus · Accepted Answer

The marginal product could be either increasing or decreasing as total product increases. Initially, as inputs are added, the marginal product may increase due to efficiencies gained (increasing returns to a factor). However, beyond a certain point, adding more inputs can lead to a decrease in marginal product due to diminishing returns, even though total product continues to increase.

If in the Short Run a Firm's Total Product Is