Question

Say you are the owner of a Pizza place. You know that when you produce 20 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information, you know that:

a. the marginal product is increasing
b. the average product is increasing
c. the average product is decreasing
d. the marginal product is decreasing

Answer 1

Answer: Average product is increasing

Step-by-step explanation:

Average product is the total product divided by the number of inputs. The marginal product is the additional output that is produced as a result of employing an extra unit of the variable factor input.

When the average product is rising, the marginal product is above the average product and when th average product is reducing, the marginal product is below the average product. From the question, when the average product is 10, marginal product is 15. It shows that the average product is increasing.