Answer :
The correct equation is c. AP = TP / N.
To understand which equation is correct, let's define the terms:
- Average Product (AP) is the total product (TP) divided by the number of units of labor (N), which can be represented as AP = TP / N. This equation tells us the output per unit of labor.
- Total Product (TP) is the total output produced with a given amount of labor and capital.
- Number of units (N) refers to the number of labor units used in the production process.
Now let's evaluate each option:
a. TP = AP - N: This equation is incorrect because it subtracts the number of units from the average product to get the total product, which does not make sense in the context of production functions.
b. TP = AP / N: This equation is incorrect because it suggests that the total product is the average product divided by the number of units, which is not the definition of total product.
c. AP = TP * N: This equation is incorrect because it multiplies the total product by the number of units to get the average product, which would not give an average but rather a total.
d. AP = TP / N: This equation is correct because it correctly defines the average product as the total product divided by the number of units of labor, which aligns with the economic definition of average product.
Therefore, the correct relationship between Average Product (AP), Total Product (TP), and Number of units (N) is given by option d: AP = TP / N.
The correct equation is d. AP= TP/N, which represents the formula for calculating the average product in a production process.
Total product (TP) refers to the total amount of output produced during a given period, while N represents the number of units of input used in the production process. The average product (AP) is the total output produced divided by the number of units of input used, and it provides an indication of the productivity of the production process per unit of input. This equation is essential for understanding the efficiency and productivity of production processes and can be used to make informed decisions about resource allocation and production planning. It is crucial for managers and business owners to have a good grasp of this equation to optimize their operations and improve their bottom line.
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