A total product curve indicates the relationship between:
A) variable input and price.
B) variable input and variable cost.
C) variable input and output.
D) output and price.

Question

Quizplus · Accepted Answer

A total product curve shows the relationship between variable input (labor, capital, etc.) and output (total product). It illustrates how total output increases as the quantity of variable input is increased, while other inputs are held constant. The curve demonstrates the law of diminishing marginal returns, which states that as more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decline. The total product curve is important for businesses to understand how much output they can produce with a given set of inputs and to determine the most effective use of those inputs.

A Total Product Curve Indicates the Relationship Between