In which stage of classical production function, the marginal product is always greater than the average product?

Correct option is A

• In Stage I of the production function, both the marginal product (MP) and the average product (AP) are increasing. This is because as more units of input are added, the production process becomes more efficient, and each additional unit of input contributes more to the total output than the previous one.

• In this stage, MP > AP, meaning each additional unit of input is contributing more to output than the average contribution of previous inputs.

Information Booster:

• Stage II: In this stage, the marginal product (MP) starts to decrease, but it is still above the average product (AP). The point at which MP = AP marks the transition between Stage I and Stage II.

• Stage III: In this stage, both MP and AP are decreasing. Here, the marginal product (MP) is less than the average product (AP), and further increases in input lead to diminishing returns.​