Question

13. In the second stage of production the average productivity of labour
a. Increases
b. Constant
c. Both
d. Decreases

Answer 1

it may increase or decrease dpends upon the progress of the firm

Answer 2

The correct answer is OPTION D: Decreases.

• The most dynamic stage of a company's development is the beginning.
• Each additional variable input inside the time limit will produce more items.
• The cost of producing a new product is gradually eclipsing the cost of variable inputs, resulting in a greater marginal return.
• In the second stage, marginal returns begin to decline.
• Each new variable input generates fewer units, albeit at a slower rate.
• The rule of diminishing returns explains this: as additional units of a variable input are added, output decreases with time while being constant for all other inputs.
• In the third stage, marginal returns start to fall.
• Adding another source of labor reduces overall production while increasing the number of variable inputs is inefficient.