MICROECONOMICS CH : 7 PRODUCTION FUNTION AND RETURNS TO A FACTOR — Economics STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 7 PRODUCTION FUNTION AND RETURNS TO A FACTOR2 Marks
Question
Can TP ever fall when more and more of the variable factor is combined with the fixed factor?
✓
Answer
Yes, TP will fall when MP of the variable factor becomes negative. It is a situation of excessive
employment of the variable factor, or a situation of disguised unemployment of the variable factor
like labour.
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