Increasing returns to a factor are indicated whenever there is increase in total product.

True

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False

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Solution

The correct option is B False
Total product increases even when there are diminishing returns to a factor, even though it (TP) increases at a diminishing rate.

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Similar questions

Returns to a factor refers to the resultant increase in the total product when only one factor is increased, keeping all the other factors constant.

Q. Explain the changes that take place in total product and marginal product under increasing returns to a factor ?

Giving reasons, state whether the following statements are true or false:
(i) Average product will increase only when marginal product increases.
(ii) Under diminishing returns to a factor, total product continues to increase until marginal product reaches zero.

Explain the reasons for : (i) increasing returns to a factor and (ii) increasing returns to scale.

Q. Diminishing returns to a factor always lead to a fall in total product.

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Increasing returns to a factor are indicated whenever there is increase in total product.

The correct option is B FalseTotal product increases even when there are diminishing returns to a factor, even though it (TP) increases at a diminishing rate.

The correct option is B False
Total product increases even when there are diminishing returns to a factor, even though it (TP) increases at a diminishing rate.