1.

Explain the relationship between average product and marginal product.

Answer»

Relationship between AP and MP:

  1. Both AP and MP can be calculated by Total Production..
  2. When AP rises, then MP also rises but MP > AP.
  3. When AP is maximum then MP = AP, or say, MP curve cuts the AP curve at its maximum point.
  4. When AP falls, then MP also falls but MP < AP.
  5. There may be a situation when MP decreases and AP increases but opposite never happens.
  6. MP can be zero or negative, but AP can never be zero or negative.


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