In the short run,average variable costs are minimized when A) MP_L equals AP_L. B) AP_L is maximized. C) MP_L is maximized and AP_L is increasing. D) Both A and B.

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Quizplus · Accepted Answer

Average variable costs are minimized when both the marginal product of labor (MPL) equals the average product of labor (APL) and the APL is maximized. This is because at the point where MPL equals APL, adding more labor does not increase the average productivity, and when APL is maximized, it indicates the most efficient use of labor resources.

In the Short Run,average Variable Costs Are Minimized When