Which of the following most accurately describes the relationship between marginal cost (MC), average variable cost (AVC), marginal product (MP), and average product (AP)?
This is the answer.
At some output level Q and corresponding labor input L, MC = AVC and MP = AP. At Q and L, AVC is at its minimum and AP is at its maximum. Hint: draw the curves.
http://images.myshared.ru/5/441515/slide_12.jpg
Can someone explain this?
Regards,
David.