LAW OF DIMINISHING RETURNS
As the use of an input increases (with other inputs fixed) a
point will eventually be reached at which the resulting addictions to output
decrease.
STAGE 1- Total product and Average product will
increase; marginal product is first increasing and then decrease.
STAGE 2- Total
product is increasing; Average product and Marginal product is both decreasing.
STAGE 3- Total
product is diminishing; Average product is decreasing; Marginal product is
negative.
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