Question

Which of the following is correct?   A. When marginal product is falling, total product must be falling.    B. All of the other answers are incorrect    C. When marginal product is falling, total product must also be falling.    D. Marginal product rises faster than total product and also falls faster than marginal cost.    E. When total product is rising, both average product and marginal cost must also be rising.

Answer 1

Below is the relationship between Marginal Product (MP), Average Product (AP) and Total Product (TP):

- MP = AP, when AP is maximum

- MP = 0, when TP is maximum

- MP becomes negative when TP starts falling

- AP is positive as long as TP is positive

A. When marginal product is falling, total product must be falling

Incorrect. TP increases even if MP falls.

C. When marginal product is falling, total product must also be falling

Incorrect. TP rises even if MP decreases

D. Marginal product rises faster than total product and also falls faster than marginal cost.

No. Increase in the Total Product at initial stages is greater than increase in the Marginal Product. So, incorrect

E. When total product is rising, both average product and marginal cost must also be rising.

Incorrect. The maximum point of AP comes before the maximum point of TP. So, when TP rises, AP might be decreasing

Hence, All options are incorrect

Option B. is the correct choice