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APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon. - Economics

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प्रश्न

APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon.

एक पंक्ति में उत्तर
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उत्तर

When C > Y, APC = C/Y > 1, but MPC is always less than 1 because an increase in consumption expenditure is always less than an increase in income, as a part of increased income is used for saving as well.

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