Marginal product (MP) and the average product (AP) curves are inverse 'U'-shaped. which of the following is correct for AP and MP.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Marginal product curve cuts the average product curve from above at the maximum point of average product curve.
Both the Marginal Product (MP) and Average Product (AP) curves are inverse U-shaped because of the Law of Variable Proportions.
Their relationship can be summarized as follows:
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When MP > AP, the AP is rising.
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When MP = AP, the AP is at its maximum point.
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When MP < AP, the AP starts falling.
Thus, the MP curve intersects (cuts) the AP curve from above at the point where AP is maximum.
