Question

In the short run, when total product increases at an increasing rate, it is known as __________.

• A. stage of negative returns
• B. stage of diminishing returns
• C. stage of increasing returns
• D. stage of constant returns

Answer 1

The correct option is C stage of increasing returns

As marginal returns are increasing it is known as a stage of increasing returns, this is illustrated on the graph as the region before point A