Question

The shape of average product curve is

• A. like the letter 'U'
• B. like an inverted letter 'U'
• C. like the letter 'S'
• D. like an inverted letter 'S'

Hint:

The average product curve forms an inverted 'U' shape, with the peak representing the most efficient use of input before diminishing returns occur.
It is important to note that after the peak, adding more inputs decreases average productivity.

Answer 1

The Correct Option is B

Step 1: Understanding the Average Product Curve:
The average product curve shows the relationship between the average product (output per unit of input) and the quantity of the input used. Initially, as more units of the input are added, the average product increases, and after a certain point, it starts to decrease. The curve typically forms an inverted 'U' shape.
Step 2: Explanation of the Shapes:
The curve starts by rising:
- As more inputs are used, the marginal product initially increases, leading the average product to rise.
The peak of the curve:
- After a certain point, the marginal returns start to diminish. This causes the average product to reach a peak before it starts to fall.
The inverted 'U' shape:
- The curve first rises, reaches a peak, and then falls as diminishing returns set in. This forms the characteristic inverted 'U' shape.
Step 3: Conclusion:
Therefore, the shape of the average product curve is typically described as resembling an inverted letter 'U'. This reflects the behavior of most production processes, where there is an initial period of increasing average product followed by diminishing returns.