Question

Which of the following is correct?

Options

• TU falls, MU = 0

• TU falls, MU < 0

• TU rises, MU = 0

• TU falls, MU > 0

Answer 1

TU falls, MU < 0

Explanation:

Because the MU curve is a strictly downward sloping graph and is also the slope for the TU curve, advancing farther on the TU graph after reaching the saturation point, i.e., MU = 0, results in a negative value of MU.