What are the three stages of the Law of Diminishing Marginal Returns
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Marginal product initially increases, the decreases until it is equal to average product at the end of Stage I. - Average product is positive and the average product curve has a positive slope. 8. Stage III - The total product curve has a negative slope.
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Marginal product initially increases, the decreases until it is equal to average product at the end of Stage I. - Average product is positive and the average product curve has a positive slope. 8. Stage III - The total product curve has a negative slope.
The law of diminishing marginal returns states that adding an additional factor of production results in smaller increases in output. After some optimal level of capacity utilization, the addition of any larger amounts of a factor of production will inevitably yield decreased per-unit incremental returns.
The three stages of short-run production are readily seen with the three product curves--total product, average product, and marginal product.
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