When the Average Product (AP) is maximum, the Marginal Product (MP) is : (Choose the correct alternative)

(a) Equal to AP

(b) Less than AP

(c) More than AP

(d) Can be any one of the above

(a) Equal to AP

AP is the total product (TP) per unit of variable factor employed and MP is the change in TP as a result of an additional variable factor employed. The relationship between AP and MP is determined by the slope of the TP curve. It can be stated as:

• When MP greater than AP, AP increases at an increasing rate

• When MP and AP are equal, AP is maximum

• When MP is less than AP, AP decreases

• When MP is rising, AP must rise, but when MP is falling, AP may rise or fall.