Capital is held fixed. The marginal product (MP) schedule of labour is given below. Total product is zero when no labour is employed.
| Labour (units) | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| MP (units) | 4 | 6 | 8 | 5 | 2 |
Consider the following statements:
(A) The total product of 3 units of labour is 18 units.
(B) Average product is the highest at 3 units of labour.
(C) The average product of 4 units of labour is 5.75 units.
(D) Total product falls after the 3rd unit of labour.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (C) only
TP is the sum of MPs; AP = TP/L.
\( \displaystyle TP: 4, \ 10, \ 18, \ 23, \ 25 \)
\( \displaystyle AP: 4, \ 5, \ 6, \ 5.75, \ 5 \)
(A) The total product of 3 units of labour is 18 units. — Correct. TP of 3 units = 4 + 6 + 8 = 18.
(B) Average product is the highest at 3 units of labour. — Correct. AP is 6 at 3 units, the highest value.
(C) The average product of 4 units of labour is 5.75 units. — Correct. AP at 4 units = 23/4 = 5.75.
(D) Total product falls after the 3rd unit of labour. — Incorrect. MP falls after the 3rd unit but stays positive (5 and 2), so TP still rises, to 23 and 25.
NCERT (2026-27): “3.3.3 Marginal Product … Since inputs cannot take negative values, marginal product is undefined at zero level of input employment. For any level of an input, the sum of marginal products of every preceeding unit of that input gives the total product. So total product is the sum of marginal products.” “3.3.2 Average Product Average product is defined as the output per unit of variable input. … Values in this column are obtained by dividing TP (column 2) by L (Column 1). …” |