Question

Which of the following statements is true​? A. The average product of labor tells us how much output changes as the quantity of workers hired changes. B. The average product of labor is at its maximum when the average product of labor equals the marginal product of labor. C. The average product of labor is at its minimum when the average product of labor equals the marginal product of labor. D. Whenever the marginal product of labor is greater than the average product of labor the average product of labor must be decreasing.

Answer 1

The correct answer is option B.

Step-by-step explanation:

The average product of labor is the ratio of total product or output and the number of labor employed. It shows the average amount of output each labor can produce.

The average product of labor is at its maximum point when it is equal to the marginal product of labor. Beyond this point, the average product of labor starts declining. So when the marginal product of labor is higher than the average product of labor the latter is increasing.