What stage of production is known as the rational stage of production?

Stage/phase two of production is regarded as rational stage because it assumes ultimate and sustainable production methods. There is positivity in marginal and average products, and labor increase leads more outputs and higher productivity levels.

Why is the second stage is ideal stage of production in the short run?

These three distinct stages of short-run production are not equally important. Stage II, with decreasing but positive marginal returns, provides a range of production that is suitable to most every firm. Although marginal product declines, additional employment of the variable input does add to total production.

In which stage of production would a rational producer like to operate?

Second stage of production a rational producer likes to operate in short – run production.

When it is called as rational zone of production?

Within the boundaries of this region is the area of economic relevance. It is only in this region that marginal product of variable and fixed factors are positive. Optimum point of input-use must be somewhere in this region. Hence, it is called rational stage of production.

Why does it not make any economic sense to produce in Stage 1 or Stage 3?

In Stage 1 the firm will not be using the capacity of the production to its optimum capacity or it will be under utilising its capacity so it does not make sense to produce at this stage. Therefore, it does not make sense to produce in stage 3. Also read: Total Product Average Product and Marginal Product.

What happens in second stage of production?

Stage II: Diminishing Returns However unlike the stage of increasing returns, here the total product increases at a diminishing rate. This happens because the marginal product falls and becomes less than the average product, which also sees a downwards slope.

Which is the best stage of production in the law of variable proportions?

Any rational producer avoids the first as well as third stages of production. Therefore, producers prefer Stage II – the stage of diminishing returns. This stage is the most relevant stage of operation for a producer according to the law of variable proportions.

In which stage of production a rational producer likes to operate in short run production 2 points?

A rational producer will always seek to produce in stage 2 where both the marginal Page 4 product and average product of the variable factor are diminishing. At which particular point in this stage, the producer will decide to produce depends upon the prices of factors.

In which stage of production a rational producer likes to operate in short run production Mcq?

In the second stage of production, a rational producer likes to operate in short-run production.

What happens in stage II of production?

Stage two is the period where marginal returns start to decrease. Each additional variable input will still produce additional units but at a decreasing rate. This is because of the law of diminishing returns: Output steadily decreases on each additional unit of variable input, holding all other inputs fixed.

In which stage of production does a rational producer operate in short run production?

second phase
A rational producer will operate in the second phase in short run since it is only in this phase that the Total Product is maximum.

What happens production stage?

Production: The production stage, also known as principal photography, is when shooting begins. During this short timeframe, additional crew will be hired—like a script supervisor to check for script continuity while filming, and a property master to acquire and oversee any of your film’s props.