Which phase of the law of variable proportions would a rational firm operate in?

The first phase, where MP is risingCorrect answerYour answerThe second phase, where MP falls but is positiveCorrect answerYour answerThe third phase, where MP is negativeCorrect answerYour answerAny phase, since output is positive in allCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

In the first phase each extra worker adds more than the last, so it pays to keep hiring.
In the third phase extra workers lower output. So the firm settles in the second phase.

Concept: Rational phase of production
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsThe law of variable proportions

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Ten questions from Production Function: TP, MP and AP, at your own pace.

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Ten questions from Production Function: TP, MP and AP, at your own pace.

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Which phase of the law of variable proportions would a rational firm operate in?

Explanation