In the short run, if average product is at its maximum, then average variable cost is at its minimum.

Question

Quizplus · Accepted Answer

This is because when average product is at its maximum, the marginal product is equal to the average product. And since variable costs are directly related to labor input, the marginal cost is equal to the variable cost. Therefore, when the marginal product is at its maximum, the marginal cost is at its minimum, which means the variable cost is also at its minimum. Hence, the statement is true.

In the Short Run, If Average Product Is at Its