APFIVE Labor Productivity and Average Variable Cost
A government policy raises wages but also introduces enhanced worker training, which improves efficiency. How are the marginal product of labor (MPL) and average variable cost (AVC) likely to be affected?
A
MPL decreases and AVC decreases.
B
MPL increases moderately while AVC increases.
C
Both MPL and AVC decrease.
D
MPL remains unchanged while AVC decreases.
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