When the Average Product of Labor Is Greater Than the Marginal

question 396

Multiple Choice

When the average product of labor is greater than the marginal product of labor

• A) the marginal product of labor must be increasing as labor increases.
• B) there must be increasing marginal returns.
• C) the average product of labor is decreasing as labor increases.
• D) None of the above answers is correct

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of the business.

Manufacturing Overhead

All indirect costs associated with the production process, excluding direct materials and direct labor.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more accurate comparison of budgeted and actual performance.

Units

The individual articles, products, or services counted to measure and record inventory, production, or sales.