Study the figure given below and find out which statement is incorrect.

As long as the AP increases, it must be the case that AP is greater than MP.

The correct answer is option 4: As long as the AP increases, it must be the case that AP is greater than MP.

The given figure shows the shapes of AP and MP curves for a typical firm.

As long as the AP increases, it must be the case that MP is greater than AP. Otherwise, AP cannot rise. Similarly, when AP falls, MP has to be less than AP.

It, follows that MP curve cuts AP curve from above at its maximum. The AP of factor 1 is maximum at L. To the left of L, AP is rising and MP is greater than AP. To the right of L, AP is falling and MP is less than AP.