Question

(a) The “classical” production function is depicted in Figure 5-1, on p. 139 of your textbook, with three (3) stages of production that are demarcated by the vertical lines in the diagram. Specifically, Stage I of production is the range of the variable input usage up to the first vertical line (variable input usage between the y-axis and the first vertical line) in Figure 5-1; Stage II is the range of variable input usage from the first vertical line to the second vertical line in Figure 5-1 (the middle section of the graph); and State III is the range of variable input usage beyond State II (variable input usage beyond the second vertical line in Fig. 5-1).

Carefully describe the characteristics of Stage II of the classical production function with regard to Total Product, Marginal Product, and Average Product of the variable input, labor.

Explain why Stage II is considered the rational stage of production.

Answer 1

The classical production function is shown in the diagram below.

Descriing Stage 2 = In stage 2 the average? product is declining but the Marginal product is positive where MP is the additional output genrated from hiring one additional worker.

In three phases of production to which are hold by the law of diminishing marginal returns the second stage is considered to as the rational phase of generation when contrasted with the first and third stage this is because of the way that this stage it turns out with the best suppositions for effective and manageable generation, in the expansion of work the aggregate creation or yields expanded similarly with a similar amount of settled factor, accordingly this stage it provides guidance to the maker on how the higher units of yield can be delivered.