The behaviour of output in terms of TP, AP and
MP on account of increasing variable input is divided into three stages, as
shown in the graph below:
Stage
I : Stage of increasing returns
 |
| Stages of Production |
1) Starts from the point of origin and continues
till the AP is maximum at point A
2) TP is increasing throughout the first stage.
Till
point M(point of infexion) increasing at increasing rate and after point M
increasing at decreasing rate till point A.
3) MP rises first, reaches the maximum at point M
and then it starts falling, but is positive throughout.
Till point M has the
positive slope and after that negative slope.
