Question

Identify the different output levels which makes the different phases/stages of the operation of the law of variable proportions from the following data:

Variable input	0	1	2	3	4	5
total product	0	8	20	28	28	26

Answer 1

Variable Input Total Product Marginal Product Phases/Stages

0 0 0 Phase/Stage-I Increasing returns to a

1 8 8 factor; MP increases.

2 20 12 Phase/Stage-II

Diminishing returns to a

3 28 8 factor; MP diminishes.

4 28 0 Phase/Stage-III

Negative returns to a

5 26 -2 factor; MP turns negative. TP diminishes.

Stage 1 is from 0-1 Unit.

Stage 2 is from 1-4 Unit.

Stage 3 is from 4-5 Unit.

Note: Where Stage 1 ends, Stage 2 starts and where Stage 2 ends, Stage 3 starts.