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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
Do you agree with the view that TP increases even when MP is decreasing?
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Answer

Yes, TP increases even when MP is decreasing. Because MP is an addition to TP. When MP is decreasing, only the addition to TP is decreasing, not the TP as such. TP continues to increase, though at a diminishing rate. TP starts declining only when MP is negative.

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