Consider the Following Statements When Answering This Question: I

question 85

Multiple Choice

Consider the following statements when answering this question: I. Whenever the marginal product of labor curve is a downward sloping curve, the average product of labor curve is also a downward sloping curve that lies above the marginal product of labor curve.
II) If a firm uses only labor to produce, and the production function is given by a straight line, then the marginal product of labor always equals the average product of labor as labor employment expands.

• A) I is true, and II is false.
• B) I is false, and II is true.
• C) Both I and II are true.
• D) Both I and II are false.

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Definitions:

Average Total Cost

Average total cost is the total cost of production divided by the total quantity produced, representing the cost per unit of output.

Marginal Cost

The swell in aggregate expenditure tied to the creation of an extra unit of a product or service.

Average Variable Cost

The variable cost (cost that changes with production volume) per unit of output, calculated by dividing total variable costs by the number of units produced.

Profit-Maximizing Level

The point of operation where a business can achieve the highest profit, typically determined by analyzing costs and revenue.