From the product schedule, total product is 600 units at 6 workers and 670 units at 7 workers. The average product at 7 workers is approximately:
A70.0 units
B85.7 units
C95.7 units
D100.0 units
Answer & Solution
Correct answer: C. 95.7 units
1. Average product is total product divided by units of the variable factor: $AP = \frac{TP}{L}$.
2. At 7 workers, $TP = 670$.
3. So $AP = \frac{670}{7} \approx 95.7$ units.
4. The marginal product of the 7th worker is $670 - 600 = 70$, which is the AP value of a different worker count, so 70 is a trap; the AP is about 95.7 units.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 3 Unit I "Theory of Production", p.17_
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