Question

Which of the following statement is true:

Options

• In the first stage, Total Product increases at an increasing rate and Marginal Product rises till it reaches its maximum point.

• In the second stage, Total Product decreases at a decreasing rate and reaches maximum, and MP becomes zero.

• In the third stage, Total Product increases and Marginal Product (MP) becomes negative.

• There is a fourth stage of production.

Answer 1

In the first stage, Total Product increases at an increasing rate and Marginal Product rises till it reaches its maximum point.

Explanation:

When total product rises at a growing rate, marginal product climbs with it until it reaches its maximum point in the first stage.