Question

1. Can a company have the average product (output) of labor, APL, equal the marginal product of labor, MP4, i.e. MP,=AP_? If “no”, then why, and if “yes”, then at what level of labor and what does it mean?

Answer 1

MPL=APL cannot be equal because in real life there exist always diminishing marginal product due to which MPL decreases, when MPL decreases APL also decreases then MPL decreases at a faster rate then APL.

However when diminishing marginal product doesn't exist, it exists constant return to variable product then MPL=APL

However due to law of variable proportion, MPL increases, then MPL decreases and finally MPL become negative and APL=MPl when APL is at maximum