Answer to Question #232397 in Microeconomics for Sis

Question

Identify the three stage of production in table form and graphically.labor= 0 1 2 3 4 5 6 7 8&total product= 0 3 7 12 16 18 19 19 16.when the law of diminishing marginal return does start to operatу?

Answer 1

The slopes, forms, and interrelationships of the total, marginal, and average product curves indicate the three stages of production.

Stage one is when a company's production expands the most. During this time, each extra variable input will result in the production of more items. It indicates that the marginal return is increasing, and all curves are rising. The average product is positive and increasing in stage one. In this stage, all three curves are growing and positive.

Stage two is when the law of diminishing returns takes effect and marginal returns begin to decline. Each extra variable input will still result in more units being produced, albeit at a slower rate. The total product curve is still climbing at this point, but the average and marginal product curves are also starting to fall.

The marginal returns start to turn negative in stage three. When one unit is added to labor, production is reduced. The total product curve begins to fall, the average product curve continues to fall, and the marginal product curve becomes negative at this point.

The table and graph below demonstrate this:

At stage two, the law of diminishing returns kicks in, with the average and marginal product curves decreasing and the total product rising at a slower rate.