The correct answer is option 4: Both AP and MP can be positive, zero and negative
- Option 1: When MP > AP, AP rises. This is a correct statement. If the marginal product (the additional output from one more unit of input) is greater than the average product, it pulls the average up.1
- Option 2: When MP = AP, AP is at its maximum and constant. This is also a correct statement. When the marginal product equals the average product, the average product is at its peak.
- Option 3: When MP < AP, AP falls. This is a correct statement. If the marginal product is less than the average product, it pulls the average down.2
- Option 4: Both AP and MP can be positive, zero and negative. This is incorrect. While AP is usually positive, MP can be positive, zero or negative. However, AP can never be negative, as it is the total product divided by the number of inputs.
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