Question

why is stage 1 and 3 are irrational and stage 2 are rational in business economics​

Answer 1

Answer:

A rational entrepreneur will not operate in these parts of an isoquant. For him, only the isoquant between ‘a’ and ‘b’ is relevant for operation and this is the reason why we say that an isoquant always slopes downward to the right and is generally convex of the origin. Such an isoquant always represents a stage of rational production.

Answer 2

Answer:

In three stages of production to which are hold by the law of diminishing marginal returns the second stage is considered to as the rational stage of production as compared to the first and third stage this is due to the fact that this stage it comes out with the best assumptions for efficient and sustainable.