When the Marginal Product of Labor Is Greater Than the Average

question 164

Multiple Choice

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

• A) marginal product of labor must be increasing as labor increases.
• B) average product of labor must be increasing as labor increases.
• C) total product must be increasing at an increasing rate as labor increases.
• D) None of the above answers is correct.

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Definitions:

Average Capital

The mean amount of capital invested or employed in a business or project over a certain period, used to assess financial efficiency.

Years with Partnership

The duration of time an individual has been involved or engaged in a business partnership.

Profit Allocation

The process of dividing the profits of a company among its stakeholders, such as shareholders, employees, or departments.