Question

When MPP cuts APP at its highest point then:

• A. MPP $>$ APP
• B. MPP $<$ APP
• C. MPP = APP
• D. MPP is also at its highest level

Hint:

Remember the curve intersections:
- The intersection point where \(\mathbf{MPP = APP}\) marks the boundary between Stage I (irrational stage of rising efficiency) and Stage II (rational stage of production) of the production function.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
In microeconomics and agricultural production, the Law of Variable Proportions describes the relationships among Total Physical Product (TPP), Average Physical Product (APP), and Marginal Physical Product (MPP).

Step 2: Detailed Explanation:
Let us analyze the mathematical relationship between APP and MPP:
- Average Physical Product (APP) is the output produced per unit of variable input:
\[ \text{APP} = \frac{\text{TPP}}{\text{Input (X)}} \] - Marginal Physical Product (MPP) is the change in total output resulting from a one-unit change in variable input:
\[ \text{MPP} = \frac{d(\text{TPP})}{dX} \] The physical relationship between these two curves is defined by three rules:
1. When MPP is greater than APP (\(\text{MPP} > \text{APP}\)), APP is rising.
2. When MPP is less than APP (\(\text{MPP} < \text{APP}\)), APP is falling.
3. When APP is neither rising nor falling (at its maximum or highest point), MPP is equal to APP (\(\text{MPP} = \text{APP}\)).
Therefore, at the highest point of the APP curve, the MPP curve intersects it from above, and the two values are equal:
\[ \text{MPP} = \text{APP} \] Let us evaluate Option (D):
MPP reaches its highest level (maximum) before APP reaches its highest level, so MPP is already falling when it intersects APP.

Step 3: Final Answer:
When MPP cuts APP at its highest point, MPP = APP, matching Option (C).