If the average product of labor curve is rising,
i.the average variable cost curve is falling.
ii.the marginal cost curve is definitely falling.
iii.the marginal product curve has reached its maximum.
A) i and iii
B) i only
C) ii and iii
D) i, ii, and iii
E) ii only

Question

Quizplus · Accepted Answer

When the average product of labor curve is rising, it means that each additional unit of labor is contributing more to output. As a result, the cost of producing each unit of output is decreasing, which is reflected in a falling average variable cost curve. However, the marginal cost curve may or may not be falling depending on how much each additional unit of labor adds to production. The marginal product curve reaching its maximum is not necessarily related to the other two curves.

If the Average Product of Labor Curve Is Rising