Initially total product increases but ultimately falls when there… - Vidyadip

Question

Initially total product increases but ultimately falls when there are diminishing returns to a factor.

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Answer

False. In a situation of diminishing returns to a factor, marginal product tends to fall. Falling marginal product implies that total product should be increasing, though at a diminishing rate. It simply implies diminishing slope of TP (total product) curve, NOT diminishing TP.

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