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Question
Statement 1: AP can take positive values only.
Statement 2: TP can take negative values only.
Options
Both the statements are true
Both the statements are false
Statement 1 is true but statement 2 is false
Statement 1 is false but statement 2 is true
MCQ
Solution
Statement 1 is true but statement 2 is false
Explanation:
The average product is calculated by dividing the total product by the number of units of the variable factor. Because total product can only have positive values and cannot have negative values, AP can only have positive values.
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Methods of Calculating National Income - Value Added Or Product Method
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