At the Amarillo Piano Company, the average product of labor stays constant at 5, regardless of how much labor is employed. This implies that

A) there are no fixed costs.
B) this firm can never maximize its profits.
C) the marginal product of labor is constant.
D) labor exhibits diminishing marginal returns.

Average Product

The output per unit of input, calculated by dividing the total product by the quantity of input.

Marginal Product

Marginal product is the increase in output that results from adding one more unit of a specific input, holding all other inputs constant.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.