Question

Q2.The hiring of labour with fixed factor of production under short run after sometimes leads to increase in cost only. What’s your opinion at what stage of production producer should make addition in labour, identify which concept in economics explains the whole situation, and justify your answer why it happens with the help of table and diagrams?​

Answer 1

Answer:

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Answer 2

At what stage of production producer should make addition in labour

Explanation:

• According to me a producer should  make addition of labour  at second stage of production because at this stage marginal product and average product of the factor which are variable is diminishing.In second stage of production the returns which comes after production is in increasing rate which becomes more profitable to the producer .

• Production function  law clearly states that at second stage of production the production increases with a diminishing rate of production .
• This happens because at first stage the production increase with increasing rate which will be not profitable to the producer only.