CFA Practice Question

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CFA Practice Question

Refer to the graph below. At point A, ______

A. marginal product is minimum.
B. marginal product is maximum.
C. marginal product is zero.
Correct Answer: B

At point A, total product begins to rise at a decreasing rate, meaning marginal product is at its maximum.

User Contributed Comments 5

User Comment
rana1970 had the tangentail slope at point A and upward been more than that of the points below A, marginal product would have been greater(i.e TP would have been increasing at increasing rate), but here situation is reverse.
ljamieson inflection point between convex/concave
Htoon Marginal products are products that are produced by one additional worker. Suppose, now, one worker can produce 5 units. When the firm hire one more worker, the firm can produce 12 units. The difference of 2 units is marginal products.
bundy Slope...if starts to decrease you have reached the point of maximum marginal output
Huricane74 Thank you @LJamieson, @Bundy
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