Figure 7-1 shows the total product curve for different levels of a variable input,labor.
Figure 7-1
-Refer to Figure 7-1.A firm would choose to operate between points C and D because:
A)marginal product has already reached a maximum.
B)average product is rising over that range.
C)marginal product and average product are positive,but falling.
D)marginal product and average product are rising.

Question

Figure 7-1 shows the total product curve for different levels of a variable input,labor.
Figure 7-1 
-Refer to Figure 7-1.A firm would choose to operate between points C and D because:
A)marginal product has already reached a maximum. 
B)average product is rising over that range. 
C)marginal product and average product are positive,but falling. 
D)marginal product and average product are rising.

Quizplus · Accepted Answer

Between points C and D, marginal product is positive but falling, while average product is rising. This means that each additional unit of labor is still adding to total output, but at a declining rate. The firm would want to operate in this range because adding more labor beyond point D would lead to diminishing returns and decreasing overall production efficiency.

Figure 7-1 Shows the Total Product Curve for Different Levels