In the third stage of production, the total product is :
Falling but positive
The law of variable proportions divides short-run production with one variable input into three stages. Stage I runs until average product is at its maximum, Stage II runs from there until marginal product becomes zero (total product at its maximum), and Stage III begins after that point.
In the third stage the marginal product of the variable factor is negative, so every extra unit of the variable input lowers total output. Total product thus declines, but it remains a positive quantity because the firm goes on producing output; it is simply less than the peak reached at the end of Stage II. A rational producer never operates in this stage.
Total product rises in Stages I and II, not in Stage III. It is at its maximum only at the boundary point where Stage II ends and marginal product equals zero. A constant total product would need a zero marginal product over a range, which does not describe the third stage.
Falling but positive option is correct.
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