Which of the following statements is true about the average product?

Question

It is defined as the additional output gained from hiring one additional unit of labor.

It cannot be represented graphically.

It decreases before reaching a minimum and then increases.

Its graphical representation is the average product curve.

Answer 1

The true statement about the average product is:

Its graphical representation is the average product curve.

To elaborate on the other statements:

1. It is defined as the additional output gained from hiring one additional unit of labor. - This statement describes the marginal product, not the average product.

2. It cannot be represented graphically. - This statement is false; the average product can be represented graphically as the average product curve.

3. It decreases before reaching a minimum and then increases. - This statement typically describes the behavior of the marginal product, rather than the average product. As more units of labor are added, average product may initially increase, reach a peak, and then decline, depending on the context, but it doesn't behave in a way that it decreases to a minimum and then increases.