How total product initially increases at an increasing rate if all the variable factors are assumed to be equally efficient - Economics - Production and Costs

Question

How total product initially increases at an increasing rate if all
the variable factors are assumed to be equally efficient Explain
with examples

Shvetika Sharma · Accepted Answer

Dear student,

Initially with the employment of additional units of labour total
product increases at an increasing rate In other words, initially
the firm experiences increasing returns to a factor The follwing
are the reasons for the same:

In in the initial stages fixed factors remain underutilised
With the employment of additional units of the labour they begin to
get better utilised
With the employment of additional units of labour
specialisation and division of labour become possible This leads to
better efficiency

How total product initially increases at an increasing rate if all the variable factors are assumed to be equally efficient. Explain with examples