When the Average Product of Labor is positive but declining, the Marginal Product of Labor could be? A. Declining B. zero C. negative D. any of the above
Question
When the Average Product of Labor is positive but declining, the Marginal Product of Labor could be?
A. Declining
B. zero
C. negative
D. any of the above
Solution
The Marginal Product of Labor could be A. Declining.
Here's why:
The Average Product of Labor (APL) is the total output divided by the number of workers used to produce that output. When APL is positive but declining, it means that although output is still increasing with the addition of more labor, the rate of that increase is slowing down.
The Marginal Product of Labor (MPL), on the other hand, is the additional output that is produced when one more unit of labor is added. When APL is declining, it means that each additional unit of labor is contributing less to total output than the unit before. This is a direct indication that MPL is also declining.
Therefore, when APL is positive but declining, MPL could be declining (Option A). It cannot be zero or negative, because that would mean adding more labor does not increase output at all, or even decreases it, which contradicts the condition that APL is positive.
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