Characteristics of the three stages of diminishing returns, Managerial Economics

CHARACTERISTICS OF THE THREE STAGES 

Stage I

Here the Total Physical Product, Average Physical Product and Marginal Physical Product are all increasing.  However MPP later starts decreasing.  The stage is called stage of increasing returns because either the APP or MPP is increasing.

Stage II

Is a stage of diminishing returns and we have:

Diminishing Average Physical Product

Diminishing MPP and

Increasing Total Physical Product

APP and MPP are declining but since the MPP is still positive, the TPP keeps on rising.  The stage where MPP reaches zero, TPP reaches maximum.

Stage III

Marks a change in the direction of TPP curve.  The APP continues to diminish the MPP continues to diminish too, but it is negative and is what distinguishes stage IV from II and I.  This is the stage of negative returns.

Posted Date: 11/27/2012 7:18:26 AM | Location : United States







Related Discussions:- Characteristics of the three stages of diminishing returns, Assignment Help, Ask Question on Characteristics of the three stages of diminishing returns, Get Answer, Expert's Help, Characteristics of the three stages of diminishing returns Discussions

Write discussion on Characteristics of the three stages of diminishing returns
Your posts are moderated
Related Questions
Hayek explaination Under a fractional reserves system, it is possible for the banking system to supply resources to entrepreneurs for investment in excess of resources that are

Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table

Define the simple statistical concepts of average Simple statistical concepts of average (mean) and standard deviation are used.  Estimating a relationship among variables need

SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses.  The monopolist controls his output or price, but not both. The monopoly maxi

Q.2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in Canada ?mum 100 words accepted#


Bikes-for-two, Inc., produces tandem bicycles. Its costs have been analyzed as follows: VARIABLE COST Materials $30/unit Manufacturing labor 3 hours/unit ($8/hour) Assembly labor 1


Elastic Supply Supply is said to be price elastic if changes in price bring about changes in quantity supplied in greater proportion.  Thus, when price increases, quantity sup

Q. Types of production function? Production function is of two different forms:  The variable proportion production function The fixed proportion production functio