Question

Discuss the interaction of "The Average Product and the Marginal Product of Labor" -What is the...

Discuss the interaction of "The Average Product and the Marginal Product of Labor"
-What is the average product doing when the marginal product is increasing ? Why?

Homework Answers

Answer #1

Average product of labor is product per unit of labor and marginal product of labor means change in product for one unit change in labor therefore intiially when APL > MPL then APL decrease with decreasing rate than that of MPL and then as APL decrease it meant to be increase which in turn increase the MPL and when MPL is higher than APL we meant to decrease APL so that MPL decrease and this all process continues till APL=MPL

When average product of labor is higher than marginal product of labour then

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