Stages of production are the consequences of:

Law of Variable Proportions.

The correct answer is Option (3) → Law of Variable Proportions.

Stages of Production: In the short run, when at least one factor of production is fixed and others are variable, the relationship between input and output is described by the Law of Variable Proportions. This law divides production into three stages:

1. Stage I (Increasing Returns): Total Product (TP) increases at an increasing rate, Marginal Product (MP) is increasing, and Average Product (AP) is increasing.

2. Stage II (Diminishing Returns): TP increases at a decreasing rate, MP is decreasing but positive, and AP is decreasing. This is the rational stage of production.

3. Stage III (Negative Returns): TP starts to fall, and MP becomes negative.

These three stages together form the basis of the stages of production, and they are a direct consequence of the Law of Variable Proportions.