(i) Stage-I (a) Total product declines, Marginal product is negative (ii) Stage-II (b) Total product increases at an increasing rate, marginal product positive (iii) Stage-III (c) Total product increases at a diminishing rate, marginal product is zero.
Understanding Production Stages and Their Characteristics
This question requires matching the three stages of production with their specific characteristics related to Total Product ($TP$) and Marginal Product ($MP$). Let's break down each stage:
Stage-I Explained
Stage-I of production is known as the stage of increasing returns. In this phase:
- The Total Product ($TP$) increases at an increasing rate.
- The Marginal Product ($MP$), which is the additional output from adding one more unit of variable input, is positive and also increases initially.
The characteristic that fits Stage-I is: (b) Total product increases at an increasing rate, marginal product positive.
Stage-II Explained
Stage-II is the stage of diminishing returns. Key features include:
- The Total Product ($TP$) continues to increase, but it does so at a diminishing rate.
- The Marginal Product ($MP$) is positive but starts to decrease.
- This stage concludes when $TP$ reaches its maximum point, where $MP$ becomes zero.
The characteristic that best describes Stage-II, especially considering the diminishing rate, is: (c) Total product increases at a diminishing rate, marginal product is zero. (Note: $MP=0$ marks the end of Stage II).
Stage-III Explained
Stage-III is the stage of negative returns. In this stage:
- The Total Product ($TP$) begins to decline as more variable input is added.
- The Marginal Product ($MP$) becomes negative. Employing more variable input actually reduces total output.
The characteristic matching Stage-III is: (a) Total product declines, Marginal product is negative.
Matching Production Stages
Based on the explanations above, we can match the stages with their characteristics:
- Stage-I corresponds to characteristic (b).
- Stage-II corresponds to characteristic (c).
- Stage-III corresponds to characteristic (a).
Therefore, the correct matching is (i)-(b), (ii)-(c), (iii)-(a).
| Stage of Production | Corresponding Characteristic |
|---|---|
| (i) Stage-I | (b) Total product increases at an increasing rate, marginal product positive |
| (ii) Stage-II | (c) Total product increases at a diminishing rate, marginal product is zero |
| (iii) Stage-III | (a) Total product declines, Marginal product is negative |
Final Answer Derivation
The matching derived from the standard theory of production aligns perfectly with option 3 provided in the question choices. The characteristics described fit logically into the three distinct stages of production, illustrating the relationship between inputs and outputs.
Important Questions from Production Function
For the following two statements of Assertion (A) and Reasoning (R) suggest the correct code:
Assertion (A): Low initial price regarded as the principal means for entering into mass market for some new products.
Reasoning (R): Firms generally enter into production of new products with excess capacity of the plant initially.
Code:
Indicate the correct code from the following types of the long run average cost curves on which the minimum average cost of production in long run can be determined:
(i) Long run average cost curve under normal production function
(ii) Long run average cost curve under linearly homogeneous production function
(iii) Planning curve
(iv) Envelope curve
Choose the correct answer from the code given below :
Which of the following is not an attribute of production function?
- Neo-classical production function has which of the following characteristics ?
(a) Positive and diminishing marginal productivities of the factors
(b) Constant returns to scale
(c) Satisfies Inada conditions
Choose the correct answer from the code below : - Which one of the following is not an Hirofumi Ujawa condition for a well behaved production function ?
