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Using the product schedule, 3 units of labour yield a total product of 330 units. What is the average product (AP) of labour at this level?
A90 units
B100 units
C110 units
D120 units
Answer & Solution
Correct answer: C. 110 units
1. Average product is total product divided by the number of units of the variable factor: $AP = \frac{TP}{L}$.
2. Here $TP = 330$ and $L = 3$.
3. So $AP = \frac{330}{3} = 110$ units.
4. The answer is 110 units.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 3 Unit I "Theory of Production", p.17_
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