Question

Given below are two statements, one is labelled as Assertion (A) and other one labelled as Reason (R).
Assertion (A) : MPP can be zero or negative but not APP.
Reason (R) : Because, APP is the ratio between TPP and units of variable factor (which is always positive) while MPP is change in TPP (owing to an additional unit of the variable factor) which can be zero or negative.
In light of the above statements, choose the correct answer from the options given below:

• A. Both (A) and (R) are true and (R) is the correct explanation of (A).
• B. Both (A) and (R) are true and (R) is not the correct explanation of (A).
• C. (A) is true but (R) is false.
• D. (A) is false but (R) is true.

Hint:

- Average values can never be negative if total values are positive.
- Marginal values reflect the slope (rate of change) and can be positive, zero, or negative.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
In microeconomics, Average Physical Product (APP) is the output produced per unit of variable input, while Marginal Physical Product (MPP) is the additional output produced by employing one more unit of the variable input.
Key Formula or Approach:
The mathematical definitions are:
\[ \text{APP} = \frac{\text{TPP}}{L} \]
\[ \text{MPP} = \frac{\Delta \text{TPP}}{\Delta L} = \frac{d(\text{TPP})}{dL} \]
where TPP is the Total Physical Product and L is the units of the variable factor (labor or fertilizer).

Step 2: Detailed Explanation:
- Evaluating Assertion (A):
As long as some output is produced ($\text{TPP} > 0$), and positive units of the variable factor are employed ($L > 0$), the ratio $\frac{\text{TPP}}{L}$ (APP) will always remain positive.
It can never be zero or negative because neither TPP nor L can be negative.
On the other hand, MPP measures the rate of change of TPP.
If TPP is at its maximum, the change is zero ($\text{MPP} = 0$).
If TPP begins to fall (Phase III of production), the change is negative ($\text{MPP} < 0$).
Thus, Assertion (A) is true.
- Evaluating Reason (R):
Reason (R) states the mathematical definition of both concepts: APP is a simple ratio of two positive values, while MPP is the derivative (change) of TPP.
This explains why APP remains positive while MPP can be zero or negative.
Thus, Reason (R) is true and is the correct explanation of Assertion (A).

Step 3: Final Answer:
Both (A) and (R) are true, and (R) is the correct explanation of (A).