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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost3 Marks
Question
From the following table find out the phase during which there are increasing returns to a factor.
Give reasons for your answer:
Units of Variable Factors 1 2 3 4 5
AP (units) 20 24 28 29 28
✓

Answer

Increasing returns to a factor represents that with increase in units of variable inputs MP increases.
AP (units) TP (units) MP (units)
20 20 20
24 48 28
28 84 36
29 116 32
28 140 32
80 16 4
In the given schedule, MP increases till 3rd unit, hence increasing returns to a factor will be there till 3rd unit of variable input.

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