Identify the correct sequence for a firm operating in the short run.
(A) Total product increases at a decreasing rate.
(B) Marginal product becomes zero
(C) Marginal product increases
(D) More and more units of variable factor are employed.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (D), (C), (A), (B)
(D) More and more units of variable factor are employed — This happens first as the firm increases the use of a variable input (like labour).
(C) Marginal product increases — Initially, due to better utilization of fixed factors, the marginal product of the variable factor rises.
(A) Total product increases at a decreasing rate — After a point, marginal product starts declining, so total product still rises but at a diminishing rate.
(B) Marginal product becomes zero — Finally, when too many variable inputs are used, marginal product falls to zero (and can even become negative beyond this).