Which of the following is correct?
A)There is no relationship between MP and MC.
B)When AP is rising, MC is falling, and when AP is falling, MC is rising.
C)When MP is rising, MC is rising, and when MP is falling, MC is falling.
D)When MP is rising, MC is falling, and when MP is falling, MC is rising.

Question

Quizplus · Accepted Answer

The correct relationship between Marginal Product (MP) and Marginal Cost (MC) is inverse. When MP is rising, it means more output is being produced from each additional unit of input, which typically leads to a falling MC because it costs less to produce each additional unit. Conversely, when MP is falling, it indicates that each additional unit of input produces less additional output, leading to a rising MC as it becomes more expensive to produce each additional unit.

Which of the Following Is Correct