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In which stage of production, the total product increases first at increasing rate and then increases at decreasing rate?
Question

In which stage of production, the total product increases first at increasing rate and then increases at decreasing rate?

A.

First stage

B.

Second stage

C.

Third stage

D.

Fourth stage

Correct option is A

The correct answer is: (A) First stage
Explanation:
The first stage of production is characterized by the law of increasing returns. During this stage:
  1. Total Product (TP) initially increases at an increasing rate due to better utilization of resources and efficiency.

  2. Marginal Product (MP) also increases, indicating that each additional unit of input contributes more to the total output.

  3. However, after a certain point, TP continues to increase but at a decreasing rate, as the effect of additional inputs starts to diminish.

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