Which of the following statements regarding comparisons of productivity across two firms is true? A) The firm with the higher AP_L is the more productive firm B) The firm with the higher MP_L is the more productive firm C) The firm with the lower MP_L is the more productive firm D) The average product of labour can vary with the choice of inputs and the level of outputs, so the firm with the higher AP_L may not be the most productive

Question

Quizplus · Accepted Answer

The average product of labor (APL) depends on the combination of inputs used and the output level produced, making it an unreliable sole indicator of productivity across firms. Different firms might have different efficiencies, technologies, or production methods, affecting their productivity independently of their APL.

Which of the Following Statements Regarding Comparisons of Productivity Across