Characteristics of the three stages of diminishing returns, Managerial Economics

Assignment Help:

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.


Related Discussions:- Characteristics of the three stages of diminishing returns

Walker''s theory of profit, Profit as rent of ability: one of the most wid...

Profit as rent of ability: one of the most widely known theories of profit was propounded by F.A. Walker. According to him profit is the rent of is the difference between the earn

Optiimization, when firm can achieve optimization

when firm can achieve optimization

At what price will demand for product be unitary elastic, Suppose you have ...

Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B

Help, BU 5210 Final ...

BU 5210 Final Summer 2013 Economic Analysis

Profit maximisation, b) Discuss the validity in Zimbabwe of the grounds on ...

b) Discuss the validity in Zimbabwe of the grounds on which the profit maximising model of the firm has been defended.

Way to deal with price rises, a) A country should always protect its dome...

a) A country should always protect its domestic industries. Discuss. b) To what extent can a country actually rely on the principle of Comparative Advantage before engaging

Banking system, T HE BANKING SYSTEM Consists of all those institutions...

T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money.  The main element of the Banking System is the Commercial Bank (in Kenya).  The sec

Direct control and moral suasion, Direct control and Moral Suasion Wit...

Direct control and Moral Suasion Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restr

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd