Answer to Question #248017 in Microeconomics for fajar

Question

9. Show that if the marginal product is always decreasing, the average product is always above the marginal

product.

Answer 1

The marginal product represents changes in the production to change in inputs applied while the average product shows the specific level of output from the inputs used. During the highest level of production marginal product equals average product and intersect at a certain point after which marginal and average products decreases. However, the average product is bigger than the marginal product.

The average product becomes greater when during the decrease of marginal product since an additional output produced is below the average output. Additionally, additional output from the variable cost decreases from the previous output, but there is a notable increase in the total product. consequently, average product is obtained from total product, hence the average product is greater than the marginal product.