Which of the following is true about the law of variable proportions?
(A) Total product eventually declines.
(B) Average product is an inverse U shaped curve.
(C) Marginal product becomes equal to Average product at its minimum.
(D) Marginal product can never be negative.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A) and (B) only
(A) Total product eventually declines – True. Under the Law of Variable Proportions, after a certain point, adding more variable input (like labour) leads to a fall in total product, due to negative marginal returns.
(B) Average product is an inverse U-shaped curve – True. Average Product (AP) first rises with increasing efficiency, reaches a maximum, and then falls — giving it an inverse U shape.
(C) Marginal product becomes equal to Average product at its minimum – False. Marginal Product (MP) equals Average Product (AP) at AP’s maximum, not minimum.
(D) Marginal product can never be negative – False. In the third stage of the law of variable proportions, MP becomes negative when too much of the variable factor is used.