PRC-3 · Chapter 12 · Question 49 of 69
In the third stage of the Law of Variable Proportions (Stage of Negative Returns), what is the mathematical state of the Marginal Product (MP)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It is negative
Explanation
In Stage III, the fixed factor becomes so overcrowded with variable workers that total output actually declines, meaning the marginal contribution of extra workers is negative.
More Firm Theory MCQs
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