which stage occurs when TP stops increasing at an increasing rate?
which stage occurs when TP stops increasing at an increasing rate?
Homework Answers
Ans: Stage 2
Explanation:
There are 3 stages in short run production function or in the theory of law of variable proportion. These are:
Stage 1: Increasing return: TP increases at an increasing rate.
Stage 2: Decreasing return: TP Increases at a decreasing rate.
Stage 3: Negative return: TP decreases, because MP becomes negative.
So, Stage 2 stage occurs when TP stops increasing at an increasing rate.
Ans: Stage 2
Explanation:
There are 3 stages in short run production function or in the theory of law of variable proportion. These are:
Stage 1: Increasing return: TP increases at an increasing rate.
Stage 2: Decreasing return: TP Increases at a decreasing rate.
Stage 3: Negative return: TP decreases, because MP becomes negative.
So, Stage 2 stage occurs when TP stops increasing at an increasing rate.
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