When the marginal and average products of labor are equal:
A)marginal product must be at its maximum.
B)marginal product must be at a minimum.
C)average product must be at its maximum.
D)average product must be increasing.

Question

Quizplus · Accepted Answer

When the marginal and average products of labor are equal, it means that each additional unit of labor is contributing the same amount of output as the average worker, and thus the average product of labor is at its maximum. This occurs at the point where the marginal product of labor is equal to the average product of labor. Therefore, option C is the correct answer, and option D is not necessarily true as the average product can be constant or decreasing depending on the production function. Option A and B are not correct as they refer to the marginal product only, while the question mentions the marginal and average products being equal.

When the Marginal and Average Products of Labor Are Equal