Question

Total product goes through three phases: It _____ initially at an increasing rate; then it increases but at a diminishing rate; finally, after reaching a maximum, it _____.

Answer 1

The total product increases initially at an increasing rate, then at a diminishing rate, before finally decreasing in magnitude after reaching a maximum.

Step-by-step explanation:

The total product in production economics goes through three phases. In the first phase, it increases initially at an increasing rate, which could be due to efficient utilization of resources as production begins. Then it continues to increase but at a diminishing rate. This phase is characterized by diminishing returns, where each additional unit of input adds less to the total output than the previous unit. Finally, after reaching a maximum, the total product decreases in magnitude until the curve levels off. This is a reflection of the fact that at some point, adding more inputs can lead to overcrowding or inefficiencies, resulting in reduced overall production.