Giving reasons state the following statements whether true or false:-
(i) When there are diminishing returns to a factor total product always decreases
(ii) Total product will increase only when marginal product increases
(iii) Increase in total product always indicate that there are increasing reaturns to a factor
(iv) When there are diminishing returns to a factor, both always falls.
ii. False. Total product will also increase when marginal product decreases.
iii. False. It is not necessary that increase in total product always indicate that there are increasing returns to a factor as in the stage of dimnishing returns to factor total product also increases but at dimnishing rate.
iv. False. When there are diminishing returns to a factor, total product increases and marginal product falls.
1)False:- the total product increases here but with a decreasing rate(means that if it increases by 10 units at 2nd level of output it will increase but the rate of increasing will be less than 10) and so on. This is because after a certain level of output,the production process becomes too crowded with variable input and the factor proportions become less and less suitable. For example in a piece of land(fixed factor) 1 labour(variable factor) is working....if 2 labour work then the work will be efficient but if the land is worked on by 20 labours(diminishing returns) it will be overcrowded and will not be as productive
2)False:- since in the above explanation the total product is increasing but at a decreasing rate i.e maginal product is falling but total product is increasing hence statement is false
3)false:- tp rises ...mp falls
hope it helps:)