Comment on the following statements: “When average product and Marginal product are equal, marginal product is at its maximum”.

The above statement is incorrect because when average product and Marginal product are equal, average product is at its maximum. Prior to this marginal product is increasing as you can see in the graph below. This occurs because the increase in variable costs results in a direct increase in productivity. The graph also shows how prior to Point P the average product is increasing at an increasing rate because the total product is increasing. At point P marginal product reaches its maximum and is going to start declining due to crowding of variable factors on the given fixed factor. Hence marginal product starts declining which means total product is increasing at a decreasing rate. This means average product will also start declining.

Source: NCERT