Question

The relationship between average and marginal variables can be stated as follows: if the marginal is greater than the average, a. the average is decreasing. b. the average is increasing. c. the marginal is increasing. d. the marginal is decreasing. e. the total is decreasing.

Answer 1

Answer:

B. The average is increasing.

Explanation:

Average variables: It is the average change in the input units of production. It is calculated by dividing total amount of changes by total number of unit changed.

Marginal variables: It is change of one unit of input, which cause changes in total units of production. As the marginal variable changes, the average variable also changes as there is changes in total unit of productions.

Hence,  if the marginal is greater than the average, the average is increasing.