Describe the relationship between the marginal and average ...

[lracut11]

Describe the relationship between the marginal and average products of labor as the employment of labor increases in the short run.
 
  What will be an ideal response?

Question 2

Entry of new firms into a perfectly competitive market raises the product's price.
 
  Indicate whether the statement is true or false

[Alyson.hiatt@yahoo.com]

Answer to Question 1

Holding other factors such as capital constant, additional workers have increasing and then diminishing marginal returns. So, the marginal product of additional workers rises and then falls, even though remaining positive. As that happens, when the marginal product is greater than the average product, the average product is increasing. When the marginal product is less than the average product, the average product is decreasing. The average product equals the marginal product when the average product is at its maximum.

Answer to Question 2

FALSE

[lracut11]

TYSM

[gcook]

Thanks for the timely response, appreciate it