Скачать или смотреть Stages of Variable Proportion | Economics for VNSGU B.Com sem 1 | Education | Himanshu Nandwani

Stages of Variable Proportion | Economics for VNSGU B.Com sem 1 | Education | Himanshu Nandwani

3 Stages of variable Proportion

1) First Stage Stage of Increasing Returns :
During the first phase, there is simultaneous increase in marginal product, average product and total product. All these go on increasing during this stage. However, the first stage draws towards its end, when the marginal product curve intersects the average product curve at its maximum point.

2) Second Stage Stage of Diminishing Returns :
During the second stage, total product increases at a diminishing rate. Besides, both average output and marginal output also show a decline, though marginal output declines at a faster rate than average output. The total output is maximum and the marginal product is zero.

3) Third Stage - Stage of Negative Returns :
During the third stage, additional doses of variable factors lead to a fall in total production: that is, the marginal product becomes negative. Such a situation arises when the use of excessive variable factors adversely affect the efficiency of both the fixed as well as variable factors. Thus, for example when excessive fertilisers, that is, an overdose of fertilisers is used on a given plot of land to improve its quality, it may result in negative returns, that is, a fall in land productivity.

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