When the Marginal Product of an Input Is ______ Than

question 8

Multiple Choice

When the marginal product of an input is ______ than the average product,the marginal units of the input _____ the average product.

• A) Larger; lower
• B) Smaller; raise
• C) Smaller; do not affect
• D) Larger; raise

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Definitions:

Operating Income

The profit earned from a firm's normal core business operations, excluding deductions of interest and taxes.

Fixed Costs

Expenses that do not change in proportion to the volume of goods or services a company produces.

Capacity

The maximum output or producing ability of a plant, machine, or company under normal or specific conditions.

Operating Profit

The earnings before interest and taxes (EBIT) generated from a company's core business operations.