Question map
Which one among the following pairs is not correctly matched ?
Explanation
The relationship between Total Product (TP) and Marginal Product (MP) is governed by the Law of Variable Proportions. When TP increases at an increasing rate, MP is rising [1]. When TP increases at a diminishing rate, MP begins to decline but remains positive. When TP reaches its maximum point (the point of zero slope), MP becomes zero [1]. However, the fourth option is incorrectly matched because when TP begins to decline (negative slope), MP becomes negative, not positive [1]. This phase is known as the negative returns stage, where additional units of the variable input actually reduce the total output due to overcrowding or inefficiency. Therefore, the statement that MP is positive while TP is declining is economically incorrect.
Sources
- [1] https://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/S000438BE/P000720/M010537/ET/s000438be-p000720-m010537-et-v1.pdf