Answer to Question #294704 in Microeconomics for Jabesa

Question

2 Of the three production stage ,which stage is efficient region in production,why/why not?

Answer 1

• Stage 2 is the most efficient stage, because at this region the marginal product and the average product are decreasing. Since the marginal product of both resource is still positive the total production will increase untill the marginal product is zero total production will reach maximum.
• Therefore its at this region that all the available resources are used to the maximum to bring maximum output.