Which of the following statement (s) is/are correct?
Statement 1: Average and marginal products are often referred to as average and marginal returns, respectively, to the variable input.
Statement 2:Since inputs cannot take negative values, marginal product is undefined at zero level of input employment.
Answer & explanation
Correct answer: option 3
The correct answer is option 3: Both statements are correct.
Statement 1: Average and marginal products are often referred to as average and marginal returns, respectively, to the variable input. This is correct.
Statement 2:Since inputs cannot take negative values, marginal product is undefined at zero level of input employment. This is correct.