If the marginal product of labor is less than the average product of labor, then the
A) marginal product must be increasing.
B) average product must be decreasing.
C) marginal product must be decreasing.
D) Both B and C

Question

Quizplus · Accepted Answer

The marginal product of labor is the additional output produced by hiring one more unit of labor. The average product of labor is the total output produced divided by the number of units of labor. If the marginal product of labor is less than the average product of labor, then the average product of labor must be decreasing. This is because the marginal product of labor is the slope of the total product curve, and the average product of labor is the slope of a ray from the origin to a point on the total product curve. If the marginal product of labor is less than the average product of labor, then the total product curve must be concave down, and the average product of labor must be decreasing.

If the Marginal Product of Labor Is Less Than the Average