Consider a firm in the short run. If AP = MP and both are positive, then total product
A) is at its minimum.
B) is increasing as extra units of the variable factor are employed.
C) is at a maximum.
D) may be either increasing or decreasing as extra units of the variable factor are employed.
E) is decreasing as extra units of the variable factor are employed.

Question

Quizplus · Accepted Answer

When average product (AP) equals marginal product (MP) and both are positive, it indicates that the total product is increasing as more units of the variable factor are employed. This is because the marginal product is contributing positively to the total product.

Consider a Firm in the Short Run