Question

The third stage of the law of variable proportion is called:

• A. Increasing returns stage
• B. Diminishing returns stage
• C. Negative returns stage
• D. Positive returns stage

Answer 1

Answer: (C)

Negative returns stage

The third stage of the law of variable proportions is called negative returns stage.

The total product diminishes , marginal product becomes negative and average product continues to diminish but will always be greater than zero.