If Average Product Is Decreasing,then Marginal Product

question 27

Multiple Choice

If average product is decreasing,then marginal product

• A)Must be increasing
• B)Must be greater than average product
• C)Must be less than average product
• D)None of the above

---

Definitions:

Advertising Elasticity of Demand

A measure of how advertising expenditures influence the quantity demanded of a product or service.

Price Elasticity of Demand

Measures how much the quantity demanded of a good responds to a change in its price, with higher elasticity indicating greater sensitivity to price changes.

Marginal Cost of Production

The increase in total production cost that arises from producing one additional unit of a good or service.

Reservation Prices

The maximum price a consumer is willing to pay for a good or service, beyond which the consumer will forgo the purchase.