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# Managerial Economics - Marginal Product and Cost

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Which of the following holds true?

A) When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling.
B) When MP is rising, MC is falling, and when MP is falling, MC is rising.
C) When MP is rising, MC is constant, and when MP is falling, MC is negative
D) There is no relationship between MP and MC.

Given the Production Function: Q = 72X + 15X2 - X3, where Q = Output and X = Input The Marginal Product (MP) and Average Product (AP) when X = 6 are:

A) MP = 120; AP = 126
B) MP = 120; AP = 126
C) MP = 144; AP = 126
D) MP = 126; AP = 120
E) None of the above

If the price of capital is \$10, the price of labor is \$15, and the marginal product of capital is 8, then the least costly combination of capital and labor requires that the marginal product of labor be:

A) 20
B) 12
C) 16
D) 10
E) None of the Above

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#### Solution Preview

Which of the following holds true?

A) When the Marginal Product (MP) is rising, Marginal cost (MC) is rising; and when MP is falling, MC is falling.
B) When MP is rising, MC is falling, and when MP is falling, MC is rising.
C) When MP is rising, MC is constant, and when MP is falling, MC is negative
D) There is no relationship between MP and MC.

Answer:
Answer B. When MP is ...

#### Solution Summary

This post answers three multiple choice questions on marginal product and cost.

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