Which of the following is NOT correct an respect of the relationship between Total Product and Marginal Product?
Answer & explanation
Correct answer: option 3
The correct answer is option 3: When TP becomes maximum and constant, MP becomes negative
The relationship between Total Product (TP) and Marginal Product (MP) follows a specific pattern:
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As long as TP increases at an increasing rate, MP also increases. (Correct)
- In the initial stage of production, adding more inputs increases total product rapidly due to better utilization of resources.
- This results in rising marginal product.
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When TP increases at a diminishing rate, MP falls positively. (Correct)
- After a certain point, the Law of Diminishing Marginal Product sets in, meaning TP is still rising, but at a slower rate.
- MP starts declining but remains positive.
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When TP becomes maximum and constant, MP becomes negative. (Incorrect)
- Correct version: When TP is maximum, MP becomes zero, not negative.
- MP becomes negative only when TP starts declining.
