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| Q. |
When average product of an input is at its maximum then :........
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| A. | AP > MP |
| B. | AP < MP |
| C. | AP = 0 |
| D. | AP = MP |
| Answer» D. AP = MP | |
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Explanation: There is a close relationship between marginal product and average product because both are derived from total product. When marginal product is equal to average product, the average product is at its maxi-mum. In the short-run production function, since marginal product starts off as greater than average product and then falls below average product, we can assume that at the "cross-over point," when MP = AP, AP is at its maximum. |
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