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Question:

When the Average Product(AP) is maximum, the Marginal Product(MP) is:

Equal to AP.

Less than AP.

Can be any one of the above

More than AP.

Solution:

As long as the AP increases, it must be the case that MP is greater than AP. Otherwise, AP cannot rise. Similarly, when AP falls, MP has to be less than AP. It, therefore, follows that MP curve cuts AP curve from above at its maximum. When AP is maximum, MP is equal to AP.