Question
Why MP curve cuts AP curve at its maximum point?

Answer

It happens because when AP rises, MP is more than AP. When AP falls, MP is less than AP. So, it is only when AP is constant and at its maximum point that MP is equal to AP. Therefore, MP curve cuts AP curve at its maximum point.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Similar questions

Total revenue is Rs. 400 when the price of the commodity is Rs. 2 per unit. When price rises to Rs. 3 per unit, the quantity supplied is 300 units, Calculate the price elasticity of supply.
Define Marginal Opportunity Cost. Explain the concept with a hypothetical numerical example.
How does an increase in the rate of excise duty affect the supply of a good?
OR
What is the likely effect on the supply of a good if a unit tax is imposed on that good? Explain.
How does fall in marginal production affect total output?
When price of a good is ₹ $12$ per unit, the consumer buys $24$ units of that good. When price rises to ₹ $14$ per unit, the consumer buys $20$ units. Calculate Price Elasticity of Demand.
When price of a good is ₹ 7 per unit a consumer buys 12 units. When price falls to ₹ 6 per unit he spends ₹ 72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.
Using demand and supply curves show how an increase in the price of shoes affects the price of a pair of socks and the number of pairs of socks bought and sold.
Goods X and Y are substitutes. Explain the effect of fall in price of Y on demand for X.
Consider the demand for a good. At price Rs $4$, the demand for the good is $25$ units. Suppose price of the good increases to Rs $5$, and as a result, the demand for the good falls to $20$ units. Calculate the price elasticity.
A producer borrows money to start a business and looks after the business himself. Identify the implicit and explicit costs from this information. Explain.