(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
- 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 ?
- Exponents of the Cobb-Douglas production represent :
- Given the production function $Q = 2 \cdot K^{1/3} \cdot L^{2/3}$, find the output level when 8 units of capital and 27 units of labour are used.
- When the quantity food production is done continuously every day, with no peaks and troughs of activity in production centres, it is termed as :
