You run a small factory in which you produce flutes. Labor is your only variable

Question

You run a small factory in which you produce flutes. Labor is your only variable input in the short run. At your current level of production, the average product of labor is 6 flutes per day and the marginal product of labor is 8 flutes per day. It follows that
(a) the average product of labor is at its minimum possible level.
(b) the average product of labor will increase if you hire another worker.
(c) the average product of labor will decrease if you hire another worker.
(d) the average product of labor is at its maximum possible level.

Explanation / Answer

From the facts give, we know the marginal product is above the average product, thus the slope of the average product must be positive and the quantity must be to the left of the maximum average product level. Let's evaluate the answers. A) Not true. The minimum ATP is always 0. This occurs at two level of Q. B) This is true be cause MP>ATP. This is the correct answer, but let's keep looking. C) False. This would be true if MP

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