Which of the following statements is true?
A) The marginal and average product curves intersect at the maximum level of output.
B) At every output level the marginal product curve lies above the average product curve.
C) The marginal product and average product curves intersect when average product is at its maximum.
D) The marginal product curve always has a positive slope.

Question

Quizplus · Accepted Answer

The marginal product curve intersects the average product curve at its maximum point because when the marginal product is greater than the average product, the average product increases. When the marginal product is less than the average product, the average product decreases. Therefore, they intersect at the point where marginal and average product are equal and average product is at its maximum. Option A is incorrect because the marginal product curve intersects the average product curve only at the maximum level of output, not at every output level. Option B is incorrect because it is not true that the marginal product curve always lies above the average product curve. Option D is incorrect because the marginal product curve can have a negative slope when the production function exhibits diminishing marginal returns.

Which of the Following Statements Is True