Explanation:

The marginal product (MP) refers to the additional output produced by using one more unit of input. It measures the rate of change in output as a result of a change in the input. On the other hand, the average product (AP) is the total output divided by the total input.

When the marginal product is above the average product curve, it means that the additional output produced by using one more unit of input is greater than the average output. This suggests that the average product is increasing.

Here is a detailed explanation of why the correct answer is option 'B':

1. Relationship between MP and AP:
- The marginal product curve intersects the average product curve at the maximum point of the average product curve.
- When the marginal product is above the average product curve, it means that the marginal product is greater than the average product at that point.

2. Average product curve:
- The average product curve is U-shaped.
- Initially, as more units of input are added, the average product increases because the additional input contributes to a higher output.
- At a certain point, the average product reaches its maximum and starts to decline.
- This is because as more units of input are added beyond this point, the marginal product starts to decrease.

3. Marginal product above average product curve:
- When the marginal product is above the average product curve, it means that the marginal product is increasing.
- This occurs when the average product is increasing because the additional input is contributing more to the output than the average.
- In other words, the rate of increase in output is greater than the average rate of increase in output.

4. Example:
- Let's consider a manufacturing company producing widgets.
- Initially, as more workers are hired, the output increases at an increasing rate (marginal product is above the average product curve).
- This can be attributed to specialization, better coordination, and increased efficiency.
- As the number of workers continues to increase, the output still increases but at a decreasing rate (marginal product is below the average product curve).
- This occurs because the factory becomes overcrowded, leading to diminishing returns.

In conclusion, when the marginal product is above the average product curve, it indicates that the average product is increasing. This happens when the additional input contributes more to the output than the average, resulting in a higher rate of increase in output.