Question

explain the behaviour of total product and marginal product if one factor is fixed and other variable​

Answer 1

Answer:

Marginal product is the addition to total product when one more unit of variable factor is employed, keeping other factors constant.<br> The law of diminishing returns to a factor states that Marginal Product of a factor initially rises with its employment level, but after a certain level of employment it starts falling and ultimately becomes negative.<br>

(i) As long as MP is positive and increasing, TP increases at an increasing rate.<br>

(ii) When MP is positive but decreasing, TP increases at a diminishing rate.<br>

(iii) When MP = 0, TP is maximum and constant.<br>

(iv) When MP becomes negative, TP starts falling.